China to help Federal Board of Revenue reduce misdeclarations

Published July 30, 2019
The decision comes at a time when the government is taking measures to control corruption within the customs department. — APP/File
The decision comes at a time when the government is taking measures to control corruption within the customs department. — APP/File

ISLAMABAD: Pakistan and China have decided to enter into an agreement to control misdeclaration at the country’s ports as the menace has been causing massive revenue losses and hurting foreign investment.

The decision comes at a time when the government is taking measures to control corruption within the customs department systematically.

“We have authorised Pakistan’s ambassador to China Naghmana Hashmi to sign the draft Memorandum of Understanding (MoU),” said the Federal Board of Revenue (FBR) Chairman Shabbar Zaidi on Monday.

The draft for the MoU was prepared by China’s State Administration of Taxes to enable tax authorities from both Islamabad and Beijing to share data and learn from each other’s best practices.

China has come a long way in controlling misdeclaration at ports. According to some estimates, at one stage, total misdeclaration at Chinese ports had reached $7-8 billion per annum however that number has decreased significantly over the years.

Both Pakistani and Chinese customs authorities have yet to agree on the variations of their reported figures.

The misdeclarations are usually of three kinds: value of goods, description (Pakistan Customs Tariff heading) and weight. It can also occur by availing wrong exemptions.

The FBR chairman told Dawn that under the proposed agreement, China will provide on the spot information regarding exports to Pakistan. “This cooperation on government to government level will help control 1misdeclaration,” Zaidi hoped.

The local markets are flooded with misdeclared imported goods. An internal review of the customs department has identified a wide margin of misdeclaration in value and quantity of imported goods from China, a senior customs officer told Dawn.

“Entry of goods into the markets without passing through proper channels is not possible without the connivance of customs officers”, he said while adding that the data has been shared with the Chinese authorities for reconciliation.

“We will tackle this menace through automation”, the chairman said, adding that these illegal goods are now being sold in every market across the country.

China is sharing data with Pakistan in a very limited way on products covered under the free trade agreement on quarterly basis. “We need this sharing of data on the spot to control the misdeclaration”, the chairman said.

The FBR had initiated action against misdeclaration 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.

Published in Dawn, July 30th, 2019

Now you can follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Untruths and politics
Updated 01 Oct, 2022

Untruths and politics

It would arguably be in the national interest for the Supreme Court to take up the cipher and settle the matter.
Farmers’ protest
01 Oct, 2022

Farmers’ protest

SEVERAL hundred farmers have converged on Islamabad for the last three days to protest against the soaring costs of...
Dasht-i-Barchi bombing
01 Oct, 2022

Dasht-i-Barchi bombing

ON Friday morning, Kabul’s Dasht-i-Barchi neighbourhood was rocked by a terrorist attack targeting an educational...
Avenfield relief
Updated 30 Sep, 2022

Avenfield relief

Accountability cannot continue to be treated like a revolving door in which politicians can be shoved in or pulled out on a whim.
Dar’s plans
Updated 30 Sep, 2022

Dar’s plans

For starters, the country doesn’t have spare dollars to burn.
Another targeted attack
30 Sep, 2022

Another targeted attack

WEDNESDAY’S deadly attack on three Chinese-origin individuals in Karachi’s Saddar area demonstrates the threat...