FBR finalizes amnesty scheme to legalize smuggled, non-paid customs vehicles: scheme to be offered for 30 days; Rs10bn revenue impact

KARACHI: The Federal Board of Revenue (FBR) has finalized an amnesty scheme to legalize the smuggled and non-paid customs duty vehicles and would offer an opportunity to offenders to pay the liability on the significant depreciated value of the vehicles.
Customnews.pk on February 23 ran a story about the issue as FBR had planned the amnesty scheme for about four months starting March 2013 to raise sizeable revenue to meet the heavy shortfall in overall revenue collection.
The earlier plan of the FBR, however, changed and now the revenue authorities would offer this scheme for one month or 30 days after finalization of draft, which is presently at the legal department of the FBR. “An SRO will be issued very soon to implement the scheme,” an official said. “The revenue impact of this scheme is estimated around Rs10 billion,” the official added.
The sources said that FBR was facing huge shortfall in revenue collection in all the taxes. Recently, the FBR had issued SROs to revised tax rate on sales tax withholding and income tax rate on import stage.
The customs officials said that the history of the FBR confirmed that it had never lost love for smugglers, tax evaders and violators. “In the past schemes were announced by FBR for accommodating the tax evaders to legalise their black wealth on payment of nominal amount on account of income tax and amnesty for smuggled vehicles,” an official said and added that no schemes were announced for the lawful entities.
The official also said that recently the years old practice of calculating of depreciation was changed inflicting heavy losses to the traders.
The sources informed that the scheme will offer a fixed tax value with 60 percent depreciation for 800CC to 1800CC vehicles imported during past five years. This depreciation will increase by five percent as the age of the imported vehicles increases towards back years.
Similarly, the scheme will offer 72 percent depreciation for 1800CC and above on vehicles imported during five years.
The sources said that against the normal import of a vehicle the beneficiary of the amnesty scheme will get at least Rs50,000 tax concession to legalize the vehicles. “No facility has been extended to the importers who had inadvertently imported vehicles in violation of Import Policy Order as such vehicles are disposed off through auction among the elite and official class of Pakistan,” the customs official said and added: “This amnesty scheme will ruin general import.”
Some other customs officials, however, believed that the amnesty scheme would address the concerns of the Supreme Court of Pakistan in the case of Balochistan law and order issue.
In the past the Supreme Court of Pakistan had taken stern stance over smuggled vehicles that were using for terror activities.
In Balochistan law and order case, the FBR had informed the apex court that a data of about 33,000 vehicles was being collected in respect of non-customs paid vehicles and assured the apex court that all such vehicles would be confiscated.
“The customs department shall do the needful within the period of three weeks and submit report to the registrar of this court for our perusal in Chambers,” the court remarked.
In its interim order on October 12, 2012 the Supreme Court observed that the interference in the affairs of the provinces of Balochistan by the secret agencies has also been prime facie, established as it has been noted that a good number of people are being obliged for the reasons best known to the agencies by allowing rahdaris to person who keep plying smuggled vehicles (also known as Kabli vehicles) without registration and without payment of customs duty.
“The rahdaris are also reportedly issued to allow unauthorized possession of illicit arms and reportedly whenever such persons are apprehended being involved in the crimes they take shelter behind such unlawful rahdaris or documents,” the Supreme Court remarked.
In this case the Ministry of Defence had submitted that all such rahdaries were been cancelled, which were issued earlier. Therefore, the Supreme Court directed that in future no such rahdaris either for vehicles or for the arms shall be issued by any of the secret agencies i.e. ISI, MI, IB or the federal or provincial governments.
The apex court also criticized the role of customs authorities in creating a poor situation of law and order because knowing well that thousands of smuggled vehicles are being plied throughout the province and are being used in the crimes to disturb law and order situation.
“Therefore, …, the FBR is directed to recover all these vehicles as early as possible and in future no such vehicle including motorcycles etc. shall be allowed to ply without the payment of customs duty and if any such vehicle found, the same shall be impounded and the accused persons shall be dealt with under the law,” the court noted.
Following the directives of the Supreme Court the collectorates had initiated massive drive to impound the smuggled and non-paid vehicles and were successful to detect a large number but the owners are influential enough to retain the same vehicles.
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FBR to announce amnesty scheme for clearance of smuggled, non-paid duty vehicles; Rs30 billion collection estimated
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