Written By: Mashhud Aslam
KARACHI: Pakistan along with other countries of the world is celebrating World Customs Day today with the theme “A Secure Business Environment for Economic Development” with due emphasis on “facilitation” of businesses which essentially include imports and exports.
However in our case the “facilitation” becomes synonymous to the word “corruption” as both the officials as well as businessmen attempt securing undue advantages and big money at the cost of supreme national interest.
In the name of enabling environment conducive for business, experiments like Green Channel have back fired. The abuse of such facility has resulted in considerable loss to the national coffers. The common abuse of Green channel is through mis-declaration and under invoicing as the importers try to get their consignments cleared by filing incorrect Goods Declarations. Big companies also abuse Risk Management System (RMS) as their profiles are used for saving tax payment.
Around 70 percent of consignments are cleared through Green Channel, and if this ratio is reversed it would result in choking of the port as there is an acute shortage of examiners and automated systems necessary for quick clearance.
Similarly, the businessmen attempt to take advantage of concessions allowed by the government time to time under SROs. A classic example of such concessions claimed by the importers are in respect of LED lights wherein concession was granted on ground that LED lights are not manufactured in Pakistan. Lately it came to the fore that LED’s are manufactured locally hence concession claimed by importers is not admissible. The controversy over availability or other wise of the concession led to legal wrangle resulting in huge choking of the port as dozens of containers awaited clearance from Karachi Ports got stuck up. The importers complain that China under CPEC was being given extra ordinary concessions denied to the local manufacturers.
Often clearance is delayed, particularly in cases where bureaucratic snags and other ministries for instance Ministry of Commerce and others besides FBR are involved.
The poor pay structure is also a major cause of corruption as while newly appointed officers supposed to collect more and more taxes in billions get salaries as low as Rupees 35,000 to 40,000 per month (Appraising Officers in BPS 16).
Tasked with huge responsibility of preventing smuggling running into big volumes of money, they can be encouraged by good salary package.
Similarly, the security of business is also compromised by issuance of SROs in a hurry and immediate enforcement. While the consignments are on way to port were hit by the SRO’s the controversy is usually taken to the courts of law again endangering the “ facilitation’ theory.
The recent policy enforced through a SRO making the payment of taxes levied on cars imported under Transfer of Residence Scheme for Overseas Pakistanis’ has resulted in stucking up of more than 6000 vehicles at Karachi port. The new conditions or restrictions imposed suddenly and without prior announcement also damage the concept of slogan adopted by WCO for 2018.
One of the regulators of business is the Inland Revenue which is required to monitor the business activity (Sales / Purchase/ Services) and to collect revenue as Sales Tax, tax on services etc by building a reliable database, but it has miserably failed encouraging smuggling.
The limitations of judiciary and inordinate delays because of increasing number of litigations specially pertaining to Pakistan Customs and Inland Revenue also make the business environment less friendly.
The importers, exporters, officials of FBR, Inland Revenue and consumers, all agree that while creating a “secure business environment for economic development,” there is a need to address all issues including fair use of facilities like Green Channel and One Window facility.
Moreover, stringent check and balance, automation, adequate number of examining staff satisfied with their monthly salary package, and plugging loopholes, ending abuse of concessions are required to make Pakistan prosperous and its businessmen feel secure and satisfied.