KARACHI: Pakistan’s tax authorities are investigating a series of fraud incidents at the country’s main customs stations, which inflicted multibillion-rupee losses on Pakistan’s economy, an official confirmed on Sunday.
Federal Board of Revenue (FBR) spokesman Hamid Ateeq Sarwar told Arab News an investigation “is underway” and its findings will be shared with the public.
The FBR’s Directorate General of Customs Intelligence and Investigation, in early January, uncovered a case involving a network of top officials suspected of a large-scale practice of cargo misdeclaration which it estimates resulted in state losses of billions of rupees.
A report by the directorate sent to the FBR chairman indicated that “organized fraudulent activity (is) taking place at Torkham Customs station through which foreign origin goods are being smuggled.” An initial investigation disclosed that 110 vehicles carrying imported goods have passed the checkpoint on the border with Afghanistan uncharged, the document seen by Arab News reads.
Similar incidents of misdeclaration were detected in Karachi and Quetta, where more than 900 containers were cleared without paying duties.
Customs experts are calling for all officials involved in the incidents to be punished. “No matter how influential those involved are they should be given exemplary punishment so that such incidents are prevented in future,” Abdul Qadir Memon, lawyer and former president of the Karachi Tax Bar Association, said.
While corruption appears to be the main obstacle to the FBR’s sound functioning, according to Memon, the problem could be solved by technology. “Automation of the system and installation of scanners at customs stations is key to eliminating corrupt practices. Improvement in the audit system may prevent under-invoicing,” he told Arab News.
The incidents of mass fraud are yet another blow to the FBR, which at the same time is facing a leadership crisis, with its chairman Syed Shabbar Zaidi’s health reportedly deteriorating due to acute stress.
The FBR is also facing a shortfall of around Rs218 billion against its revised revenue target of Rs2.62 trillion set for the July 2019–January 2020 period.
All these result in an atmosphere of uncertainty, which “is the worst one can afford at this moment. Revenue mobilization is necessary for Pakistan’s economic viability as a state,” taxation expert Dr. Ikram ul Haq told Arab News.
The developments raise concerns over the International Monetary Fund (IMF) second quarterly review of Pakistan’s $6 billion bailout program. IMF representatives arrived in Islamabad on Monday.
