KARACHI: The Federal Board of Revenue (FBR) has ordered a detailed audit of the Faceless Assessment System, a pioneering digital customs clearance initiative introduced on December 15, 2024. The review, led by the Directorate General of Post Clearance Audit, aims to evaluate the system’s effectiveness and identify potential irregularities that may be affecting revenue collection and trade transparency.
Despite being designed to enhance efficiency by eliminating physical interaction between customs officials and traders, the Faceless Assessment System has come under scrutiny for alleged irregularities. Reports indicate that over 70% of import consignments were cleared through the “green channel,” which is susceptible to misdeclaration and under-invoicing, leading to potential revenue losses. Furthermore, assessment staff faced excessive workloads and operational restrictions, limiting their ability to request supporting documentation, thereby raising concerns about compliance.
Another critical issue highlighted is the persistence of corrupt practices, as assessment officers reportedly maintained phone contact with traders and agents, circumventing the intended transparency of the system. Additionally, the Directorate of Intelligence & Investigation (I&I) was deactivated prior to the system’s implementation, removing a key safeguard against smuggling and revenue fraud. Subsequently, Yaqoob Mako was appointed to oversee the system’s operations, but his team was provided with limited resources, restricting enforcement capabilities.
Key Focus Areas of the Audit
The audit will examine transactions conducted under the Faceless Assessment System during its initial three months (December 15, 2024 – March 15, 2025). Major evaluation areas include:
– Accuracy in Duty and Tax Collection – Ensuring correct assessments and revenue generation.
– Regulatory Compliance – Verifying adherence to Pakistan’s customs laws.
– System Efficiency – Measuring the extent to which clearance delays and costs have been reduced.
This review will be conducted under Section 26A of the Customs Act, 1969, with findings expected to be submitted to the FBR by mid-June 2025. A final report will detail recommendations for system refinement, aiming to strengthen transparency and minimize revenue leakages.
Stakeholders Await Audit Findings
Trade bodies, customs agents, and businesses keenly await the audit’s results, as its conclusions may significantly influence Pakistan’s Ease of Doing Business rankings. The government, meanwhile, maintains that the Faceless Assessment System was introduced to modernize customs operations and tackle inefficiencies.
“This audit underscores our commitment to fair and transparent customs procedures,” an FBR spokesperson stated. “We believe the Faceless Assessment System has potential, but we must ensure it functions as intended.”
With the audit expected to shed light on loopholes and inefficiencies, policymakers may soon deliberate on further measures to safeguard revenue collection while maintaining streamlined trade facilitation.