Ayesha Mudassar

The business community has proposed measures to tackle massive under-invoicing in imports, which causes massive losses to the exchequer and creates hurdles in the documentation of economy. While briefing the Senate Committee on Finance regarding budgetary proposals, Ahsan Malik, Chief Executive Officer (CEO) of the Pakistan Business Council (PBC), said under-invoicing has been witnessed in imports from the United Arab Emirates (UAE) with price disparities in numerous items including pharmaceuticals, mechanical appliances, minerals and chemicals, textiles, and steel. "The country loses about Rs150 billion each year to under-invoicing in imported goods,” he pointed out.

He said the PBC proposals include verification of sales and income returns submitted by commercial importers, assurance of availability of information regarding deposited duties and taxes, and determination of fixed import trade prices (ITP) depending on the industry. President of Lahore Chamber of Commerce and Industry (LCCI) Kashif Anwar said that the lack of publicly available information regarding import consignments has encouraged importers to under-declare the prices to evade taxes. He said when an importer declares a product at a much lower rate than its actual price, he not only saves customs duty but also sales tax and advance income tax. “Values at which import shipments are cleared through Pakistan Revenue Automated Limited (PRAL) or CARE need to be publicly available,” the LCCI president recommended.

Furthermore, he said the government should insist on Electronic Data Interchange (EDI) for imports from free trade agreements and preferential trade agreements. President of Karachi Chamber of Commerce and Industry (KCCI) Muhammad Tariq Yusuf, while expressing deep concern over massive under-invoicing, recommended effective implementation of the LIVE (linking international values) system. “This system would enable assessing officers to cross-check declared values and to re-assess in case of variations,” Tariq stated. The proposed changes will help increase the overall tax base and prevent massive under-invoicing and dumping of imported products. Moreover, this will help boost Pakistan’s manufacturing base.

Credit : Independent News Pakistan-
WealthPk