ISLAMABAD: Pakistan and China have implemented long-awaited Exchange of Data Information (EDI) under which tax authorities of both countries would share imports and exports data through electronic software.
The EDI would help Pakistan overcome massive under-invoicing worth $4 to $6 billion per annum and would enable real time recording of trade between the two countries. The country’s tax authorities have been demanding China to ensure provision of EDI for resolving the concerns on account of under-invoicing.
Now the Directorate General of Reforms & Automation – Customs has developed a software in this regard, which has also been tested by Trade Development Authority of Pakistan (TDAP).
However, according to a top FBR official, there is need to analyse whether the connected software possessed capability of transmutability of translating Chinese technical language into English through this placed EDI as without this facility the customs authorities will not be able to get benefits out of this shared information.
There is difference in data related to imports from China in the range of $4 billion between the two sides so there is need to devise mechanism for reconciliation of actual data related to exact level of bilateral trade between the two countries.
Tax authorities would be able to curb $1 billion under-invoicing on annual basis it would have multiplier effect on taxation as well as increasing tax collection in the range of 30 to 35 percent on account of all taxes at import stage.
“When goods of declaration (GDs) would be filed in China it would be instantly available with Customs authorities at clearing stations so it would help customs officials to ascertain its exact value on the basis of which they could charge tax collection,” said the official.
It will not be possible to declare different value at different places on the same items, he added.
