THE launch of the faceless customs assessment system as part of the government’s Tax Transformation Plan is a significant reform that makes use of technology to maintain anonymity in the customs process to determine taxes on import shipments. The initiative was launched last month at the Karachi port, which handles the bulk of imports before their transportation to the rest of the country. The system in Karachi is set to become fully functional from next month. In the interim, Prime Minister Shehbaz Sharif wants the initiative to be extended to other upcountry ports and border stations to streamline imports. Under the project, customs appraisement functions would be relocated outside the customs collectorates.

Under the initiative, a goods declaration or bill of entry submitted by an importer or his agent is randomly assigned to an assessing officer, who is physically located at a customs station, which is not the port of import in the automated system, for appraisal of duties and taxes. Thus, it separates the assessment process from the physical location of the port through the use of technology. In this way, it also delinks the goods’ clearance procedure from the geographical location where the goods are available for examination, increasing transparency in tax assessment. The introduction of faceless customs assessment is expected to usher in a significant change in the overall working of the customs department and facilitate trade by reducing the goods’ clearance time, besides improving efficiency and transparency. Other advantages include reduced discretion for customs officials in appraising import duties and taxes, and fewer chances of corruption and tax evasion by ending collusion between officials and importers/ agents. The results so far are said to be encouraging, and underscore how digitisation and technology to reduce human interventions can help the government plug tax evasion and under-invoicing of imports to boost its revenues.

Published in Dawn, January 15th, 2025