Internal investigation: K-P customs officials accused of running smuggling racket
Officers have been underwriting duties on containers from Afghanistan, costing national exchequer billions of rupees
Pak-Afghan border Torkham. PHOTO: AFP
LAHORE:
Khyber-Pakhtunkhwa’s porous border with Afghanistan has long been a hotbed for the smuggling of various items both in and out of Pakistan. However, an internal investigation by the country’s revenue collector has uncovered how much of it, in recent times, has been facilitated by customs officials posted in the province’s border regions.
A recent probe by the Intelligence and Investigation (I&I) Department of the Federal Board of Revenue has found several revenue officers in K-P were involved in smuggling and tax evasion activities that have cost the national exchequer billions of rupees, The Express Tribune has learnt.
The department’s report, submitted by the Director-General I&I to the FBR chief, implicated all of the province’s regional customs offices in the irregular activities. It accused several officials posted at these offices of deliberately underwriting customs duties and manipulating the digital customs clearance system to allow hundreds of containers, mostly loaded with dry fruits, onions and other food items, to be smuggled in from Afghanistan.
According to the report, customs duty collection was at its worst at the Torkham crossing between October and November last year. It pointed out that officials of the Torkham collectorate cleared over 110 cargo trucks and containers without performing due diligence.
Several customs appraisal officials cleared consignments while deliberately underestimating their value, the report revealed. In one instance, customs intelligence officials upon reassessing the value of a dry fruits consignment at University of Peshawar discovered the concerned officers collected only Rs82,400 in duties as opposed to their revised estimate of Rs7.2 million.
The report stated that in many cases, a single goods declaration file was prepared for multiple vehicles or consignments in place of separate import general manifest files as mandated by customs rules. It also mentioned that regional FBR offices in K-P were not properly maintaining the Web-Based One Customs (WeBOC), the digital system customs authorities use to clear imported goods. For instance, several trucks permitted into the country without proper goods declaration or on manual gate passes were still listed as being held at Torkham in WeBOC records.
Based on the intelligence report, the FBR has posted and transferred several custom collectors including member custom operation while a large number of deputy collectors and custom appraisers are likely to be reshuffled as well in the coming days, a senior FBR official said. He acknowledged that the investigation has raised immense concern within the revenue collection agency.
According to the report, the smuggling racket being operated with the collusion of customs officials was so emboldened that even the I&I department stirring into action in December last year did not put a stop their illegal activities.
The recent revelation is also not the only one pointing towards large scale customs duty evasion in K-P’s border areas. An earlier report by The Express Tribune revealed how fruit traders have been avoiding taxes by misrepresenting Iranian apples as imports from Afghanistan. As edible imports from Afghanistan are exempt from the 17% per kilogramme duty on items exported by other countries, traders of Iranian apples are having them shipped to Pakistan via its northwestern neighbour. The practice is estimated to have cost Pakistan $6.09 million in revenue in the last season alone.
Published in The Express Tribune, February 4th, 2020.
Khyber-Pakhtunkhwa’s porous border with Afghanistan has long been a hotbed for the smuggling of various items both in and out of Pakistan. However, an internal investigation by the country’s revenue collector has uncovered how much of it, in recent times, has been facilitated by customs officials posted in the province’s border regions.
A recent probe by the Intelligence and Investigation (I&I) Department of the Federal Board of Revenue has found several revenue officers in K-P were involved in smuggling and tax evasion activities that have cost the national exchequer billions of rupees, The Express Tribune has learnt.
The department’s report, submitted by the Director-General I&I to the FBR chief, implicated all of the province’s regional customs offices in the irregular activities. It accused several officials posted at these offices of deliberately underwriting customs duties and manipulating the digital customs clearance system to allow hundreds of containers, mostly loaded with dry fruits, onions and other food items, to be smuggled in from Afghanistan.
According to the report, customs duty collection was at its worst at the Torkham crossing between October and November last year. It pointed out that officials of the Torkham collectorate cleared over 110 cargo trucks and containers without performing due diligence.
Several customs appraisal officials cleared consignments while deliberately underestimating their value, the report revealed. In one instance, customs intelligence officials upon reassessing the value of a dry fruits consignment at University of Peshawar discovered the concerned officers collected only Rs82,400 in duties as opposed to their revised estimate of Rs7.2 million.
The report stated that in many cases, a single goods declaration file was prepared for multiple vehicles or consignments in place of separate import general manifest files as mandated by customs rules. It also mentioned that regional FBR offices in K-P were not properly maintaining the Web-Based One Customs (WeBOC), the digital system customs authorities use to clear imported goods. For instance, several trucks permitted into the country without proper goods declaration or on manual gate passes were still listed as being held at Torkham in WeBOC records.
Based on the intelligence report, the FBR has posted and transferred several custom collectors including member custom operation while a large number of deputy collectors and custom appraisers are likely to be reshuffled as well in the coming days, a senior FBR official said. He acknowledged that the investigation has raised immense concern within the revenue collection agency.
According to the report, the smuggling racket being operated with the collusion of customs officials was so emboldened that even the I&I department stirring into action in December last year did not put a stop their illegal activities.
The recent revelation is also not the only one pointing towards large scale customs duty evasion in K-P’s border areas. An earlier report by The Express Tribune revealed how fruit traders have been avoiding taxes by misrepresenting Iranian apples as imports from Afghanistan. As edible imports from Afghanistan are exempt from the 17% per kilogramme duty on items exported by other countries, traders of Iranian apples are having them shipped to Pakistan via its northwestern neighbour. The practice is estimated to have cost Pakistan $6.09 million in revenue in the last season alone.
Published in The Express Tribune, February 4th, 2020.