KARACHI, July 14: The Federal Board of Revenue (FBR) has failed to meet revenue target fixed for customs duty during the fiscal year ended June 30, 2007. A total of Rs94.248 billion has been collected towards customs duty, which is nine per cent less than the last fiscal collections. The total collection stood at Rs102.753 billion.

According to official figures made available to Dawn by customs authorities there was a sudden jump in duty collection during June 2007, which stood at Rs11.141 billion, as against average monthly collection of Rs8 billion throughout last fiscal.

This has been attributed to advance collection of duty made by customs against amount of duty anticipated in the first month (July) of new fiscal from leading importers and clearing agents. It is an annual ritual of FBR to collect revenue in advance and discourage refunds and payments at the fiscal end to all categories of taxpayers and importers to meet their revenue targets.

Another startling development came to fore was poor performance of the Model Customs Collectorate (MCC) functioning under the Customs Administrative Reforms CARe. Official figures disclosed that during out-going fiscal the MCC collected customs duty of Rs28.709 billion as against a collection of Rs63.653 billion fetched by the Collectorate of Appraisement and Collectorate of Port Qasim.

It is pertinent to note that the QICT container cargo clearance came under CARe since October 2006, while loose cargo, which is of small quantity, is still being checked by the appraisement collectorate.

Container cargo coming through Karachi International Container Terminal (KICT) and Pakistan International Container Terminal (PICT) is also being cleared through CARe and this constitutes over 55 per cent of total container cargo.

Though country’s imports during last fiscal (2006-07) increased by around 10 per cent as per FBR figures (private sector puts the increase at around 17 per cent), but revenue collection from customs duty registered a fall of around nine per cent.

This implied that mis-declaration and under-invoicing were rampant and a check and balance system had not been installed to stop heavy leakage of revenue. Therefore, it is obvious that CARe, which could have been a blessing for the national exchequer and the business community, has become the main cause of revenue leakages.

Customs insiders say that the system operators with the connivance of officials tamper with CARe computers and clear high tariff goods under low rate of duty and also clear huge volumes of mis-declared goods in the process when the computer system is being re-routed.

All Pakistan Customs Agents Association Secretary General Arshad Jamal said that FBR’s defective policies had been the main cause of revenue loss.

He said there had been a large number of valuation rulings and SROs from the FBR during the year, particularly covering clearance of goods such as tyres, auto parts, fabrics, cosmetics, cigarettes and perfumes, which resulted in high rate of smuggling of these items.

He further said that clearance of iron and steel sheets, scrap and other goods through CARe resulted in huge revenue loss. Smuggling through Afghan Transit Trade (ATT) is also at its peak thus causing huge revenue loss, he added.