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Tax authorities initiate money laundering probe against importers

January 20, 2019

KARACHI: Tax authorities have launched money-laundering and tax evasion investigations into the transfer of billions of rupees worth of foreign currency to bank accounts abroad by a number of importers through under invoicing of their imported cargoes, sources said on Saturday.

The Inland Revenue Office has detected some cases where payment made through electronic import form (EIF) of banking channels were found to be much lower than the value of goods cleared at the Customs stage.

“The difference of amount is believed to be sent through illegal channels such as Hawala and Hundi,” an official of the revenue authority said.

The sources said the Inland Revenue selected some cases after Pakistan Customs seized huge quantity of containers, which were carrying Indian fabric.

To strengthen monitoring of import payments from Pakistan, the State Bank of Pakistan (SBP) and Pakistan Customs have started a joint project for issuance of EIF in August 2016. The system was launched to stop outflows of foreign exchange that were used for money laundering under the garb of import payments, the sources said.

Sources in the FBR said importers were making letter of credit (LC) through banking channels and mis-declaring goods at the time of clearance to conceal the actual value of goods.

The discovery of Indian goods is such an example, the FBR official said, adding that Indian fabric’s import is not allowed, but importers are mis-declaring the goods at the Customs stage.

The official said banks were contacted to identify those

importers, who were maintaining accounts to make

payment for their imports, but the importers were not traceable.

A notice sent to an importer showed that the turnovers of a bank account were on the higher side during a short span of time, and the transactional activity comprises various modes, ie cash / transfer, outward clearing, and withdrawals, which was unusual.

The notice also said that high value transactions had been done in such banks on a structured manner, and it was found out that the account activity and turnover were beyond the stated profile.

Interestingly, the official said, no business documents were provided, while opening the bank account. Such importers had not filed their income tax returns for any past year, the official added.

Recently, the government had brought commercial importers into the normal tax regime. Under this regime, returns filing is made mandatory and the FBR expressed the hope to bring commercial importers into the tax net.