Goods to be virtually accessed to check duty, tax evasion

In a major development, the Pakistan Customs is all set to place a virtual assessment of goods to duty and taxes, a move that aims to minimise corruption by limiting physical interaction between tax officials and traders.

The system, expected to eliminate duty and tax evasion during clearance at the import stage, will be developed in the light of international best practices and will be put in practice by March 31, 2021.

According to a local media outlet, that virtual assessment is one of the major reforms initiatives to facilitate domestic trade, minimise chances of duty evasion and accelerated transit trade.

The deadline for implementation of the faceless assessment and 28 other major reforms initiatives are June 30, 2021. “We have already set timeline for the implementation of each reforms,” the official said.

According to the reform documents, the virtual assessment will be carried out in three phases. The proposed system will ensure the identity of importer/Customs agent is not visible to the assessing officer and vice versa. Under the system, it will also be ensured that minimum documents are called for assessment by the relevant officers. In this regard, the platform will provide MIS reports to the supervisory officers for monitoring.

To further facilitate traders for virtual assessment, a provision will be created in the system for online review hearing before the Assistant Collector (Group) instead of existing physical hearing proceedings. As part of the second major initiative, Pakistan will introduce online duty calculator system by September 30 to facilitate traders and general public/overseas Pakistanis.

The system is being developed to comply with the obligation of WTO’S Trade Facilitation Agreement. It will enable any person to calculate the leviable Customs duty and other taxes on import of any specific goods into Pakistan on the basis of description or HS code through the Federal Board of Revenue’s website/WeBOC page without the requirement of user ID.

As per details, the platform will provide for duty/taxes calculation on ad valorem basis as well as specific duty/taxes if chargeable on any item such as mobile phones, edible oil etc. The system will enable expatriate Pakistanis to calculate duty/taxes on vehicles under gift/transfer of residence schemes.

Moreover, the system will provide for auto currency conversion as per the applicable rate of exchange, and will seek necessary input from the user regarding the unit of measurement for accurate calculation of duty/taxes. It will also take into account applicable exemptions of duty/taxes for the computation of duty.

The Customs department is also working on putting in place a risk management system (RMS), advance processing of goods declaration filed at the Air Freight Unit latest by December 31 to expedite the clearance of air cargo.

As part of the reforms, the facility for filing of pre-arrival manifest for air cargo will be developed in WeBOC, according to the guidelines of International Air Transport Association.

The advance manifest will contain separate reports for the goods in international transit, goods for home consumption and domestic transshipment. The flight manifest and Master Air Waybill will be filed by the airline or its authorised agent. House Air Waybill will be filed by the freight forwarder or authorised ground handler.

Moreover, the manifest will be filed in the system before the landing of the aircraft (after wheels-up). And necessary penalty prescribed under the rules will be levied in the system for non-filing of advance air cargo manifest.

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