ISLAMABAD: The local markets are flooded with misdeclared imported goods causing huge revenue losses and adversely impacting the existing and future investment in different sectors, said Federal Board of Revenue (FBR) Chairman Shabbar Zaidi on Thursday.

Earlier, Adviser to the PM Naeem-ul-Haq tweeted that the FBR chairman is here to stay, at least temporarily putting to rest persistent talk of an impending replacement at the tax bureaucracy.

The FBR chairman is not being changed, he declared blandly. “[Zaidi] will remain in his position.”

As the air cleared, Zaidi reiterated his priorities for the FBR.

Assessing the quantum of misdeclaration is a tough task, but entry of goods into the markets without passing through proper channels is not possible without the connivance of customs officers.

“We have identified ports and a network involved in the process”, Zaidi told Dawn on Thursday.

The misdeclaration is of three kinds: value of goods, description (PCT heading) and weight. It can also occur in the shape of availing wrong exemptions.

The chief taxman said these illegal goods are now being sold in every market of the country. Once goods get clearance from ports, it is not possible to raid premises on suspicions of misdeclaration.

“We are seriously working on this issue” he said, adding the involvement of customs officers in this practice will also be minimised through increased automation.

The FBR chairman spurred into action following the discovery of massive misdeclaration of goods after data from Web-Based One Customs System Glo (WeBOC-Glo) was analysed.

The data showed around 62 per cent of the total 69,000 goods declarations showed differences in assessed value and declared value of goods.

On the other hand, around 21pc of the misdeclarations were made in weight and quantity.

According to customs officials, the difference is mainly due to the valuation ruling and international pricing mechanism used by the department whereas misdeclarations may also include value as well weight and quantity. The official added that FBR issued show—cause notices to just 1pc of the GDs.

Zaidi said some changes will be made in the Web-Based One Customs System (WeBOC) to ensure checks against such practices.

Pakistan Customs (PC) in February revamped WeBOC by developing and designing an upgraded user-friendly software version ‘WeBOC-Glo’ supported by a robust Risk Management System.

Currently, around 35,000 importers have been issued user IDs for WeBOC.

Zaidi said that the business community should also ensure they are not indulging in practices such as under-invoicing or misdeclaration of imported goods.

“The FBR will take punitive action against those involved.”

The warning comes at a time when the country’s business community is already protesting against government’s tax measures.

He said that, “importers, clearing agents and delinquent staff found involved in such practices shall be liable to punitive action under the law.”

He also urged traders to refrain from dealing in smuggled goods and categorically stated that “whosoever is found involved in any way dealing with the sale, purchase or storage of the same will be dealt with strictly.

“Prime Minister Imran Khan has taken a very serious notice of the situation and has ordered a number of measures to cleanse the society from the menace of smuggling.

“We are currently in the works of launching a zero tolerance ruling against smuggling”, he added while lamenting that “smuggling is killing our industry. We want institutional automated non-discretionary system”.

The FBR, in a bid to rein in smuggling, recently appointed 3,000 officials across the country in various cities.

The FBR chairman said the Customs Department is currently working on various proposals to solve the issues of under-invoicing, misdeclaration and smuggling.

Published in Dawn, July 19th, 2019