KARACHI: Federation of Pakistan Chambers of Commerce & Industry (FPCCI) President Zakaria Usman while lamenting the Pakistan Customs for not upgrading its customs laboratory during the last more than 60 years has urged FBR Chairman Tariq Bajwa to either upgrade it or allow the private sector for establishment of a state of the art modern laboratory at its Karachi Station, like private bonded warehouse, and facilitate the importers and exporters in speedy, hassle-free and reliable testing reports of their goods, particularly chemicals.
He said this while inaugurating the meeting of FPCCI Standing Committee on Customs held under the Chairmanship of Saquib Fayyaz Magoon at Federation House Karachi. The Chamber President elaborated that the trader whose chemical has already been tested in the customs laboratory is again required to get it tested from some other laboratory such as Haji Ibrahim Jamal (HEJ) Institute, or PCSIR Lab, on the pretext that the results of the Customs Lab is not reliable, thus causing inordinate delay in clearance of goods and unnecessary financial burden and losses to the trader in the form of demurrage/detention charges.
Zakaria Usman stressed the need of a transparent system wherein direct contact between a tax collector and taxpayer is minimized as it promotes corruption and tax evasion. He proposed, “There is no need of a separate full-fledged Customs Valuation Directorate General in this age of information technology”. He urged that in dispute cases, the trader should not be subject to demurrage/detention charges if he is not on fault. Zakaria Usman also urged to do away with the discrimination in duty and taxes, between industrial and commercial importers of raw-material as it is ultimately consumed by the industry- either cottage, small, medium or large scale.
Referring to the gradual increase in the menace of smuggling, Zakaria Usman disclosed that it is mainly due to the higher rate of sales tax. He added, “That is why the FPCCI in its Shadow Budget has suggested to reduce the sales tax rate to 5 per cent (non-refundable, non-adjustable at import and manufacturing stage) as the present higher rate of sales tax at 17 per cent is a main source of corruption and malpractice in refund claims and input adjustment, smuggling, under-invoicing, high cost of doing business, sluggish industrial and investment activities. This 5 per cent sales tax will lead to generation of Rs 1500 billion in the next financial year on the one hand and give relief to the common man especially to the low and middle income group by reducing the inflation, on the other hand. Moreover, curtailment of smuggling will give industry a breathing space, encourage legal imports and increase government revenue.”
Chairman of the FPCCI Standing Committee on Customs Saquib Fayyaz Magoon castigated Customs Valuation Directorate for issuing Guideline on valuation of 220 items without consultation of the concerned stakeholders and FPCCI. He suggested that FBR should make distinction between importers of finished goods and importers of raw material plus capital goods as importers of raw material and machinery facilitate the import substitution and export oriented industries. Therefore, the FBR in policies should facilitate these importers by allowing such type of importers the same benefit as allowed to industry.
Shaikh Shakil Ahmed Dhingra wanted that the test report of an item should be valid for three months.
Shabbir Mansha Churra proposed to levy a uniform valuation price at all customs stations of the country as in Karachi the same item is valued at higher price than upcountry.
