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ISLAMABAD: The Federal Tax Ombudsman (FTO) has completed investigations in several own motion cases including misuse of a facility of unaccompanied baggage, clearance of imported goods, pending inquiries against 180 FBR officials, bidding process of auction of non-duty paid vehicles, and corrupt practices by customs authorities in Balochistan.

Sharing details of some major cases, a senior official at the FTO office told Business Recorder here on Saturday that multiple administrative issues were investigated and recommendations were made to the FBR for improvement in the governance of tax processes.

An own motion investigation was initiated by the FTO through the exercise of jurisdiction conferred under Section 9(1) of the Federal Tax Ombudsman Ordinance, 2000 (FTO Ordinance). The facility of unaccompanied baggage at Karachi was misused through clearance of goods in commercial quantity and of items which were non-bonafide baggage in terms of the Baggage Rules, 2006.

The investigation revealed that the existing system of clearance of baggage in the WeBOC computerized system was not being implemented in majority of the baggage consignments which in turn provides an open opportunity of abuse for clearance of non-bonafide baggage in violation of legal provisions.

Being a glaring case of maladministration, the FTO directed the FBR to ensure the processing of all baggage consignments through automated module in WeBOC without any exception and to ensure its implementation at Collectorate of Customs Enforcement, Karachi. The same will not only eradicate any chance of misuse of the subject facility but will also result in prompt processing of the bonafide baggage of the incoming passengers at various airports across the country.

The FTO also took up the issue of pending inquiries against 180 FBR officials.

The FTO took an own motion of the issue that since 2015, around 180 officials of the FBR are facing inquiries on charges of corruption and inefficiency but the enquiry officers were delaying the completion of the departmental enquiries in connivance with the delinquent officials. During the investigation, secretary Revenue Division, in his comments reported that inquiries were initiated against the FBR employees under Government Servant (E&D) Rules, 1973 and Civil Servants Efficiency and Discipline (E&D) Rules, 2020. However, in all inquiries, pending under E&D Rules, 2020 the stipulated period of sixty days had already elapsed; no serious effort had been made by the inquiry officers to bring the accused officials of FBR to book.

The FTO in this independent investigation concluded that delay, inefficiency and incompetence in concluding inquiry proceedings initiated under E&D Rules, 1973 and E&D Rules, 2020 has not only adversely affected the internal accountability of FBR but also tantamount to maladministration in terms of Section 2(3) (ii) of the FTO Ordinance.

Hence, the FTO has directed FBR to call for explanation of all the inquiry officers, committees, and take appropriate action against them for causing inordinate delay in conclusion of inquiry proceedings. The FBR was also advised to evolve a centralized monitoring mechanism at the Headquarters level to ensure that the disciplinary proceedings are completed.

In another own motion investigation, it was observed that various Customs Collectorates and Directorate of Customs Intelligence failed to properly identify at the time of auction of non-duty paid vehicles the persons who participated in the customs auctions and did not record their particulars which were not only against the rules but handing of vehicles to such unknown persons could cause high risk to the security of the country. Investigations were, therefore, initiated. During the initial investigation, the Customs authorities in Quetta confirmed that no CNIC or other particulars were recorded in the bidders’ files. The FTO was apprised that CNICs were missing in nine cases while in 23 cases the CNICs numbers were corrected.

It was also reported that 36 non-filers have deposited leviable income tax and deposited challans with the customs auction authorities. Similarly, the Director of Intelligence and Investigation-Customs, Gwadar also reported to the FTO that despite obtaining relevant credentials of successful bidders, CNIC numbers of 38 bidders were not recorded. FTO issued instructions to ensure that complete personal details are entered in the auction documents

It was also observed that non-filers also participate in auctions and offer bids of heavy amounts; however, there is no institutional mechanism to monitor these transactions. Hence, the Federal Board of Revenue was directed to evolve a mechanism whereby Customs Department could electronically transmit the information of all the successful bidders to the Inland Revenue Department for initiating necessary proceedings. The Federal Tax Ombudsman also recommended in the order that if the bidders are non-filers, the Inland Revenue Department (IR) should take necessary legal action to bring them under tax net, through issuance of instructions, rules etc.

On receipt of numerous complaints of incompetence, inefficiency and exercise of powers for corrupt and improper motives by the customs authorities in Balochistan, an own motion investigation was initiated through exercise of jurisdiction conferred under section 9(1) of the Federal Tax Ombudsman Ordinance 2000 by the FTO.

In the pursuance of FTO’S inspection team’s report, directions were issued to FBR for improvement of Collectorate(s) functions, to forestall the chances of malpractices and corruption, the official added.

The FTO had taken the own motion that due to abnormal delay in clearance of consignments at the three customs clearance collectorates of Karachi, importers had to pay delay charges amounting to Rs0.500 million to Rs0.700 million rupees on each container. This delay not only increased cost of doing business and landing cost of importers but also resulted in shortage of industrial raw materials. Terminal operators were directed to ensure adoption of electronic/ online procedures and improve their capabilities. The FBR was also directed to coordinate with Karachi Port Trust for provision of space to major terminal operators. After a thorough investigation and in the light of findings thereof, it was recommended to FBR to direct the concerned authorities to strengthen the Risk Management System that will ensure more clearances through Green and Yellow Channels and to develop a pre-arrival processing system including advance cargo information, advance filing of goods declaration, e-payment system. The authorities were directed to conduct periodic Time Release Study’ to measure actual performance of port activities and customs procedures that will facilitate trades at port and improve dwell time for importers. It was also recommended that FBR should also request the ministry of port and shipping to depute an independent audit agency to evaluate and improve clearances and performances by the terminal operators at the ports and submit quarterly implementation report.

In another case, the FTO has observed that preparation and use of fake/fabricated documents and bogus entries in the EV system of Provincial Excise and Taxation was a serious criminal offence.

Official added that the customs authorities needed to take appropriate measures in terms of the provisions of the Customs Act, 1969 to nab the culprits and initiate appropriate criminal proceedings including enforcement action for seizing vehicles. Besides, there was a need to make required systemic changes for smooth and automated transfer of relevant information electronically to the provincial authorities in order to forestall such incidents in future.

Copyright Business Recorder, 2022

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