FBR sniffing around supermarkets for smuggled goods

KARACHI: The Federal Board of Revenue (FBR) has launched a nationwide drive to physically check if supermarkets are selling smuggled goods to dodge taxes, sources said on Monday.

The sources in FBR said major activities of monitoring have been launched in Karachi, Lahore and Islamabad. To begin with, FBR teams started inspection at the Centaurus Mall Islamabad, Emporium Mall Lahore and Dolmen Mall and the Forum Karachi.

Badar-ud-Din Qureshi, chief commissioner Inland Revenue Regional Tax Office-II Karachi confirmed with the News that the team started physical inspection of markets to check the sale of smuggled goods.

“We have identified shops having illegal goods through physical surveys,” Qureshi said. “The team would simply ask for documents to know if duty and taxes have been paid.” Field offices of Inland Revenue and Pakistan Customs launched the anti-smuggling on the directives of FBR Chairman Shabbar Zaidi.

The chief commissioner said the monitoring was initiated after realising the adverse impact of smuggled goods on the economy in general and industrial activities in particular. Strict measures to curb imports led to influx of smuggled goods in the country in addition to take toll on revenue collection. The FBR, which is the apex tax authority, collected Rs580 billion in the first two months (July and August) of the current fiscal year as against the desired target of Rs644 billion, witnessing a shortfall of Rs64 billion during the period. A decline in imports worth one billion dollars was also one of the reasons of revenue shortfall.

The government will continue to face challenges to boost the revenue collection and create avenues to stabilise the economy. The government has set a gigantic revenue collection target of Rs5.55 trillion for the current fiscal year of 2019/20, which appears ambitious considering slowdown in the economy. Growth fell to 3.3 percent in the last fiscal year from 5.5 percent a year earlier. The central bank foresees a growth of 3.5 percent this fiscal year.

Last month the FBR decided to launch inspection to verify the presence of smuggled goods in main shopping markets across the country. It was also decided to launch the monitoring jointly by Inland Revenue and Pakistan Customs.

A team of officers from Regional Tax Office-II (RTO) Karachi and Pakistan Customs initiated the inspection. The team was headed by an additional commissioner of Inland Revenue and also supported by two deputy commissioners and inspectors. Besides, the officers from customs, like assistant collectors, preventive officers and inspectors, were included in the team.

Qureshi said inspection teams have been asked to gently deal with shopkeepers even after finding of smuggled goods. “Team will give reasonable time to a shopkeeper to provide proofs,” he said. “In case the shopkeeper fails to provide verification then the tax authorities would take action as per the law.” The chief commissioner said all the zones of the offices conducted surveys of markets and identified shops and retail outlets involved in trade of imported goods.

“The nominated individuals will only conduct the inspection on the basis of information provided by the zones,” he added. The FBR said the drive is a facilitation measure to document the economy.