Customs intelligence identifies massive tax theft

Corrupt customs officials assisted fraudsters in evading duties worth billions of rupees

LAHORE: In a bid to curb fraudulent import and export practices that substantially dent the public exchequer every year, it seems that authorities have finally decided to step up efforts right at the start of the new year.

Recently, the Directorate of Customs Intelligence and Investigation has identified the evasion of customs duty worth billions of rupees in the import of Iranian fruits to Pakistan.



In December last year, senior customs officials responsible for collecting tariffs, who spoke on condition of anonymity, informed The Express Tribune that Iranian apples entering Pakistan were being entered into records as imports from Afghanistan to avoid 17% duty.

At present, Pakistan does not impose regulatory duty on fruit imports from Afghanistan.

The practice has now been officially confirmed by the Directorate of Customs Intelligence and Investigation and it has decided to conduct an audit of Pakistan’s import record and send all the certificates to the embassy of Pakistan in Kabul for verification.

At the same time, the government has decided to develop a foolproof system for curbing deceitful import and export dealings in future.

The ongoing official investigation into the matter has revealed that cargo vehicles from Afghanistan had been entering Pakistan through the Ghulam Khan check post in the North Waziristan Agency as well as through several other checkpoints, whereas they are only permitted to make their way into Pakistan through the Torkham check post.

Director-General of Customs Intelligence and Investigation Zahid Hussain Khokhar sent the initial report of the inquiry to Federal Board of Revenue (FBR) Chairman Shabbar Zaidi, in which different methods employed by the corrupt officials and fraudsters to evade taxes on a massive scale have been highlighted.

According to the report, 95% of Afghan certificates produced by exporters are found to be fake. A few days ago, the customs intelligence team inspected four vehicles carrying fresh fruits to Pakistan via Ghulam Khan check post. The trucks had been cleared by the customs under Goods Declaration (GD) numbers 7,017 and 7,160.



The inspection revealed that the trucks had been cleared by customs officials at the checkpoint in the absence of an Afghan certificate.

In addition to this, at the time of issuing the clearance, customs authorities wrote ‘Manufactured in Afghanistan’ on the cargo of fruits while the weight of the fruits was also misquoted.

When contacted, DG Customs Intelligence and Investigation Zahid Hussain Khokhar said that the department launched an investigation into the matter immediately after it received information of tax evasion based on fake certificates.

“Iranian fruits are presented as produced in Afghanistan because of which billions of rupees in customs duty and tax is evaded,” he told The Express Tribune. “I have initiated the audit of the customs record and now we will send all the certificates presented by the importers to the Pakistani embassy in Kabul and get them verified from the Afghan government.”

“To ensure that such fraudulent practices stop, we are also introducing a strict monitoring system which will be implemented soon,” Khokhar added.

Published in The Express Tribune, January 12^th, 2020.

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