Penny wise, pound foolish: PTI govt forms company for trade

It will perform all functions currently being done by Pakistan Customs

ISLAMABAD:

The government has set up a private limited company to efficiently handle international trade, expanding the size of public sector that is contrary to its ongoing drive to reduce state footprint due to a severe financial crunch.

Pakistan Single Window Company will perform all those functions that are currently being done by Pakistan Customs of the Federal Board of Revenue (FBR). Under the new regime, these functions will still be performed by the Pakistan Customs but it will get additional monetary benefits for doing the core job.

The National Assembly Standing Committee on Finance will consider the Pakistan Single Window Bill 2020 for approval on Wednesday to give permanent legal cover to the company.

Much before its approval, the FBR has set up the Pakistan Single Window Company and has sought applications for hiring the top management. Office facilities have been taken on rent in Karachi and Islamabad and Pakistan Customs’ officials have already started availing additional allowance of up to Rs175,000 to perform the same old job, according to sources in the FBR.

The decision to set up the company, which will effectively provide an information technology platform, has been taken at a time when the government has decided to abolish over 67,000 jobs in the public sector.

It also did not increase the salaries of government employees due to a severe financial crunch. However, in the midst of government’s rightsizing and squeeze on expenditures, the new company has been set up.

“Pakistan single window means an information and communication technology-based facility that allows persons or entities involved in trade and transport to lodge standardised information and documents with a single-entry point to fulfill import, export and transit-related regulatory requirements in Pakistan without being required to submit the same data element more than once,” said the proposed bill.

However, a majority of these functions are currently being performed by the FBR through its Web Based One Customs (WeBOC) software. The last member customs, Jawad Agha, had upgraded the WeBOC software and updated the missing modules.

The FBR does not have good experience of setting up private limited companies to perform public sector work. The FBR-administered Pakistan Revenue Automation Private Limited (Pral) is a highly mismanaged company. Pral’s affairs have already gone haywire.

Officials said its management availed annual performance rewards for the just ended fiscal year, though the FBR had barred its field formations from giving awards.

The company has recently purchased software, whose procurement process may require some scrutiny. The estimated cost of the software is Rs400 million and Pral has also issued a purchase order, said the sources.

Official version of the FBR could not be obtained till the filing of the story.

“It is necessary that an autonomous body is established to simplify cross-border trade processes, reduce the cost of doing business and facilitate trade at national and international levels,” according to a provision of the Pakistan Single Window Bill, which the government introduced last month in the National Assembly.

However, all such functions are already being performed by the FBR on the WeBOC system.

An official, who remained engaged with developing the new system, said the World Bank had recommended setting up a new company for trade facilitation and getting a law passed from parliament.

He said a special platform would also connect about 72 government and private sector entities related to international and domestic trade and their licensing regimes. A private limited company would also ensure flexibility in hiring the human resources and timely completion of the task, he added.

The proposed bill states the Pakistan Single Window Company, which would act as an operating agency, would develop, roll out, operate, maintain, expand, enhance, replace and market Pakistan single window and systems.

FBR employees can serve on the company on secondment and “during the period of their secondment with the operating entity, the government officers shall be entitled to a special Pakistan single window allowance, in addition to the regular government pay and admissible allowances, as notified by the lead agency in consultation with the operating entity,” said the bill.

The FBR has already started paying additional allowance equal to Rs175,000 to the grade-20 officer, Rs150,000 to the grade-19 officer, Rs120,000 to the grade-18 officer and Rs90,000 to the grade-17 officer over and above their regular and special FBR pay.

To finance operations of the company, the government has proposed that sources of funding shall include the “income generated from levy of fee and service charges and income generated from sales of products, services and investments”.

It has already started utilising the funds that every importer pays at the time of submitting the goods declaration form at the rate of Rs500 per form.

Published in The Express Tribune, July 8^th, 2020.

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