The Directorate Post-Clearance Audit (PCA) South has detected a significant tax evasion operation, uncovering fraudulent activities by importers exploiting the export promotion scheme under SRO 492, resulting in a loss of Rs 27.5 billion to the national exchequer.
The investigation identified approximately 1,268 importers who, from 2014 to 2022, claimed duty and tax exemptions on imports valued at Rs 27.5 billion but failed to meet the re-export requirements stipulated by SRO 492, thereby evading taxes.
SRO 492 provides a tax waiver for importers on the condition that the imported goods are re-exported within 18 months.
However, PCA South’s audit found that this condition was not adhered to, leading to significant revenue loss for the customs department.
The audit revealed that out of the total implicated importers, 764 are under PCA South’s jurisdiction, 645 fall under PCA Central, and 164 are overseen by PCA North, indicating a widespread abuse of the scheme across Pakistan.
In response to these findings, PCA South has referred the cases for legal action, including the encashment of security deposits made by the importers at the time of filing for imports.
Efforts led by DG PCA Chaudary Zulfiqar and PCA South Director Sheeraz Ahmed are underway to conclude proceedings swiftly, aiming to penalize the fraudulent importers and recover the unpaid taxes.
Tax experts have lauded the actions taken by PCA South, emphasizing the importance of compliance with customs regulations.
They also called for policy reforms to address vulnerabilities in export schemes that allow for such extensive fraud, highlighting the need for measures that prevent financial losses to the country’s economy.
