Federal Board of Revenue to Start a Crackdown against Smugglers

  • From September 1, the Federal Board of Revenue will launch a crackdown against smugglers.
  • This is being done to stem the influx of products through illicit channels that have badly hit native industries.
  • Merchants will be invited to submit export product documentation during the verification process.
  • Joint teams will be appointed to check import documents for imported goods available for sale to consumers.
Federal Board of Revenue to Start a Crackdown against Smugglers
Federal Board of Revenue to Start a Crackdown against Smugglers

The Federal Board of Revenue (FBR) has announced that a crackdown will be launched against smugglers next week.

This is being done because the inflow of goods through illicit channels has badly hit local industries. While addressing the 21st convention of the Management Association of Pakistan (MAP), the Chairman of FBR, ShabbarZaidi, said:

“From September 1, FBR is declaring war at the retail level where non-taxed imported goods are flooding the market to the detriment of the national exchequer.”

He also said that the manufacturing sector is bearing the brunt of taxation while the trade and unorganized services sector are getting off scot-free.

He said that the Dubai-focused import model of economic development wouldn’t work here. “If Pakistanis kept parking their money overseas, then the crisis at home would no doubt go from bad to worse,” Chairman said.

No Tangible Investment Made:

Chairman FBR said:

“In the last 70 years, no tangible investment had been made. This had resulted in running two Pakistans; one for the haves and the other for the have-nots.”

Pakistan has been too Inconsistent in its Policymaking:

Mr. ShabbirZaidi said that Pakistan has been too inconsistent in its policymaking. In the last 40 years, Pakistan has divorced the books of accounts from the taxation system. We don’t have reliable data and documentation of the economy remains wishful thinking.

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Discussing Conflicts between Mindsets of Tax Collectors and Taxpayers:

He further spoke about the disharmony between the mindsets of the tax collectors and the taxpayers. He said that the solution lay in fixing the system instead of reforming the individual and for this, FBR has instituted reforms that simplify the process and ensure minimum interaction between the FBR and taxpayers.

Joint Teams Would Visit Shopping Areas:

In major cities across the country, special joint teams would visit major shopping areas, particularly large retailers, to check documents of imported goods available for sale to consumers.

Joint teams will check import documents of foreign goods to ensure compliance with various requirements of the law.

The Federal Board of Revenue board has also started a phased program to combat the sale of smuggled goods in the local market.

Merchants Will Submit Export Product Documentation:

The FBR indicated that merchants will be invited to submit export product documentation during the verification process. In case of unavailability of documents, the merchant will have enough time to give his answer on this matter.

Earlier, the Chairman of the FBR had finalized the strategy to bring all sectors in the tax net. He said that the FBR will not take any decision that will affect the industry and business in the country.

In the past year, the FBR had sought the army chief’s help following up to a 600% increase in smuggling of certain goods that were subject to regulatory duties.

The Chairman FBR had briefed Chief of Army Staff General Qamar Javed Bajwa about growing unchecked smuggling, particularly under the garb of Afghan Transit Trade (ATT).

The issue of increasing smuggling under the ATT had also been taken up with Afghan President Ashraf Ghani by Prime Minister Imran Khan.

The Afghan president had been given options either to accept import quotas or pay duties on imports and then claim the levies back once the goods reached Afghanistan.

The economy of Pakistan is being affected seriously by the availability of smuggled goods, especially consumer goods in markets.

The FBR has been taking various steps to curb smuggling and one of those was an onsite inspection of shops; a move that is likely to irritate traders who are already agitating against the government over its documentation of economy.

Teams to Conduct Respective Identification:

The FBR has powers to seek import documents for imported goods available for sale to consumers from the person dealing in such goods.

Special Joint Teams would constitute officials of the Inland Revenue Services and Customs while officials of security agencies will extend back-up support to the teams.

All joint teams will be conducting respective identification as being officially designated and each team will be headed by a senior official.

If for any reason such documents are not readily available at the shops/offices, the teams will provide an adequate opportunity to the retailers to submit the papers after a reasonable time.

Directions to Provide Assistance to the Teams:

The officials of FBR have directed the member Customs (operations) and members (IR-Operations) have to supervise the activity and provide assistance to the joint teams wherever required.

The traders can lodge complaints against any undesirable activity by the special joint teams by reporting at the helpline. The purpose of taking this step is to expedite drive against smuggling and protect the local economy of the country,

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