KARACHI, Oct 24: In a bid to expedite the collection of infrastructure tax (inf tax) the Sindh government is to join hands with the Customs to benefit from the modern Care (Customs Administrative Reforms) system.

At present the tax at the rate of 0.5 per cent of C&F value of imports is collected through Pakistan Revenue Automation Limited (Pral).

The Sindh ministry of excise and taxation collects an average of Rs4.5 billion from inf tax every year, the main source of revenue of the government. It is deducted on imports made through the Karachi Port, Port Qasim and the airport.

Giving details of the tax collections Director Taxation Javed Memon told Dawn that talks with the Model Customs Collectorate were in final stages and hopefully the collection of inf tax through Care would be started in a month.

He pointed out that since Care ensured round-the-clock clearance of imports the tax collection would also be greatly enhanced. Presently, clearances under the old Customs system are only carried out during the day.

Efforts are being made to computerise collection of inf tax at Jinnah Terminal on imports cleared through the ICG Gate on 24-hours basis, the official said adding that the existing system of tax collection through manual challans carries risk of revenue leakage. The Pral has been requested for automation of the procedure at the airport. It charges the Sindh government Rs15 per challan as collection fee.

The department collected Rs4.6 billion through inf tax last year. There is an increase of 15 to 20 per cent in tax amount every year with the gradual rise in imports.

Replying a query, Mr Memon said that the entire trade, except gold and silver, paid the tax on its imports whether these are meant for the upcountry or for local consumption. The gold importers had challenged the tax in the Sindh High Court.

The department has won the case at the Single Bench stage, while the importers then moved an application with the Double Bench. They argued that their imports were mainly meant for re-export and secondly, they were not using much of the infrastructure provided by the government.

The gold imports are presently cleared against bank guarantees till the case is finalised by the court. There are another 250 cases whose imports are cleared against bank guarantees, the official said without elaborating on the nature of imports.

About exemptions the official said that all imports meant for the Karachi Export Processing Zone were exempted from the inf tax. So are imports made under Afghan Transit Trade, all government imports and those made under donations by the aid and relief agencies.