KARACHI: The Pakistan Business Council (PBC) has stressed the need to improve monitoring of transit trade by ensuring the provision of submission of bank guarantee.
It is suggested that Pakistan needs to take more proactive approach in ensuring that the provisions in place for monitoring misuse of the new Afghanistan Pakistan Transit Trade Agreement (APTTA) including the provision of submission of bank guarantee equivalent to government levies are collected on Afghan imports.”
The PBC explained that making smuggling under the guise of transit trade less feasible will reduce pressure on domestic manufacturers while at the same time increase the government revenue.
The council said in its budget proposal for 2014-2015 that the governments of Pakistan and Afghanistan have signed a new transit trade agreement in 2010 which done away with the provision of a negative list while at the same time most of the mechanisms suggested fir misuse of the transit trade including: quantity restrictions, collection of customs duties etc. not been incorporated in the new government.
Moreover, another proposal sent to the Federal Board of Revenue, the PBC highlighted the issues of massive under-invoicing and dumping of imported products and said that depending on industry inputs, values are not fixed for imports consignments; basis of valuation can be origin, weight, volume etc.
The council further added, “For items prone to under-invoicing and mis-declaration, FBR designate one or two ports including the dry ports for clearing of import consignments. This will allow better monitoring of the import consignments.
It is also proposed that the National Tariff Commission should be strengthen to allow industry to fairly compete with unscrupulous imports and government to benefit from increased revenue.
The PBC recommended to make public the value at which import shipment are cleared whether through PRAL or CARE, however, name of importer should be kept as confidential. Additionally, the old customs general order 25 needs to be revived with a provision that local manufacturers be given the option to buy at a 15 percent premium any consignments, which appear undervalued.
Sales tax and federal excise duty deposited by local manufacturers should be published as was the practice in the past.
Giving the rationale, the PBC said that it would give greater transparency at import stage that would lead to reduction in mis-declaration and evasion of duties, besides customs officers would also accountable under the system.
The PBC said that it will reduce the incidence of sales tax and FED evasion and increase government revenues.

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