KARACHI, June 28: Central Board of Revenue Chairman M Abdullah Yusuf has said that successful test and trial operation of Customs Administrative Reforms (CARe) at Karachi Customs will be replicated throughout the country.
Speaking at a dinner organized by Textile Associations of Pakistan and Committee for the Rationalization of Tariff on Textiles and Raw Materials here on Monday night, the CBR chief said that the success of the pilot project of CARe at Karachi customs was very encouraging. “The new system has discontinued the direct contact between importers and customs official and has also reduced clearance time of a consignment,” he added.
Over 18 trade bodies belonging to exporters of various goods and of large categories of textile products arranged the dinner for CBR chairman for accepting almost all of their demands in the new budget (2005-06) by removing textile exports from Sales Tax regime and putting them on zero regime and rationalizing of tariff of a large number of raw materials.
Mr Yusuf informed the gathering that clearance of import consignments under CARe was presently taking 16 hours and it would be reduced to four hours soon. “Now an importer can get his goods declaration documents cleared before the arrival of ship,” he added.
“Today I can claim that 90 per cent issues pertaining to income tax and sales tax have been resolved, but we have to look into other problems which are causing leakages in revenue collection,” the CBR chairman said.
Mr Yusuf threw a challenge to the business community and said, “We have met your demands and reposed confidence in you by removing all harsh laws which were the irritants you had been pointing out for the last so many years and now it is your responsibility not to let us down and pay your dues judiciously.”
He further said that the CBR would not run after the business community to get taxes and the objective of this exercise was to frame fiscal policies which were conducive and helpful for growth of trade and industry and only then the government could get its due share in taxes.
“The CBR and business community have to work together as partner in business and we would like to seek your assistance in plugging leakages and loopholes in collection of customs duty which is the only sector where a lot has yet to be done,” he said.
He said that there was a lot of potential in revenue collection from customs but it was not being fully tapped because of under-invoicing and other ills.
He said the age of rent seeking as well as incentives and protection was over. “One has to compete at the market place or get eliminated by tough and fierce competition in the world market.”
The government needs revenue to put up infrastructure, including roads, power, gas, water and other facilities like upgraded ports and other modes of transportation for quicker and faster delivery of export goods from the place of manufacture to the world market, he added.
However, it was unfortunate that our tax base was very narrow which could not meet all these challenges and out of 150 million people only 1.2 million were taxpayers, he said. He urged the business community assist the government in brining potential taxpayers under the tax net.
“If you disappoint us things may roll back and then you cannot blame the government which has discharged its duty by accepting most of your demands in the new budget,” he maintained. The tax-to-GDP ratio of Pakistan was one of the lowest in the world and until and unless we did not improve this the momentum in growth could not be sustained.