FBR to launch scheme on non-duty paid goods for legal cover

ISLAMABAD: In a fresh bid to legalise volume of smuggled items ranging up to $10 billion on annual basis, the FBR is planning to launch nationwide scheme to offer owners of non-duty paid (NDP) goods on payment of duty and taxes as well as with fine/penalty.

It will be some kind of amnesty scheme for legalising the NDP goods existed in the domestic markets to get legal cover. However, this proposed scheme will not provide opportunity to smuggled/NDP vehicles. The FBR’s top officials say that in the presence of fine/penalty clause, this proposal could not be termed fresh amnesty scheme on any account. The exact details of this planned move will be shared next week. In the aftermath of verification exercise carried out in major urban centers by the Customs staff, the FBR has taken decision to provide last opportunity to businessmen to legalise their NDP items after paying duty, taxes and penalty surcharge. But its rate is proposed to be less than the normal duty and taxes rates. “FBR is working on developing an ‘expeditious settlement’ of ‘non duty paid’ fast moving consumer goods available in the market. The details will be released next week. The purpose is to facilitate businessmen and improve documentation without disturbing business confidence” Chairman FBR Shahbar Zaidi said in his tweet on Saturday.

Before going all out against smuggled items, the FBR plans to give last opportunity to businessmen involved in selling products within the premises of main city centers to settle clearance of non-duty paid fast moving consumer goods as the FBR will launch stern action against smuggled items after expiry of upcoming proposed scheme.

The FBR’s Member Customs (Operation) Dr Jawad Uwais Agha is working on developing this plan where the tax machinery is intended to offer negligible duty rate for clearance of non-duty paid consumers goods to convert them legal products. Although, exact details of the scheme are not yet known but the government is going to offer some kind of another amnesty scheme because of its inability to crackdown into business centers of the country where non-duty paid products were sold out without fear of any punitive action.

The special joint teams of the FBR had completed anti-smuggling drive which was launched from September 1, 2019 at major shopping centres and large retail outlets in all major cities to verify import documents of foreign goods available in the markets. The exercise was carried out to check selling of smuggled goods in the country.

Under the provisions of the Customs Act, 1969 FBR has powers to seek import documents for the imported goods available for sale to consumers from the person dealing in such goods.

The National Anti-Smuggling Strategy was approved by the incumbent regime as the smuggling was rampant due to lack of a proper and effective mechanism on borders and different loopholes. The total loss incurred due to smuggling every year was in billions and the figures were alarming for a country burdened with debt and inflation which in turn was creating problems for the common man.

Smuggling was one of the causes for shutting down of industries and loss of jobs. From July 2018 to September 2019, revenue had increased by 56 percent through steps of the federal and provincial governments against smuggling.

Under the Customs Authority, coordination would be increased among different agencies including Customs intelligence, Federal Board of Revenue, Federal Investigation Agency, Intelligence Branch and Military Intelligence on the custom check posts on the borders of merged districts of Khyber Pakhtunkhwa and Balochistan along with Iran and Afghanistan.

The Customs Authority replacing the Customs Directorate would mainstream the trade on borders and build a central database based on the latest technology, automation and best international practices putting an end to corruption and siphoning of money.

The sources in FBR said that the volume of smuggled prone items ranges to the tune of $9 to $10 billion in accordance with the study done by FBR officers almost five years ago but the FBR high-ups did not agree to the authenticity of the estimated figures. The volume of smuggled items might be more than $10 billion or less than this estimated figures but it is fact that smuggling had become major menace for tax collection machinery.

Fast-Moving Consumer Goods (FMCG) are products that are sold quickly and at a relatively low cost. Examples include non-durable household goods such as packaged foods, beverages, toiletries, over-the-counter drugs, and other consumables.

Many fast-moving consumer goods have a short shelf life, either as a result of high consumer demand or as the result of fast deterioration. Some FMCGs, such as meats, fruits, vegetables, dairy products, and baked goods are highly perishable. Other goods, such as pre-packaged foods, soft drinks, candies, and toiletries have high turnover rates. Sales are sometimes influenced by holiday and/or seasonal periods and also by the discounts offered.