The government has promulgated Tax Laws (Second Amendment) Ordinance 2019 for major increase in penalties on cash currency smuggling, ranging from $10,000- $200,000 and above, up to fine of ten times of value of currency and imprisonment up to 14 years depending on the amount of currency seized under different categories/slabs.
Briefing the media at FBR's Headquarters here on Wednesday, FBR Member Inland Revenue (Policy) Dr Hamid Ateeq Sarwar, FBR Member Customs (Policy) Javed Ghani and FBR Member IT Asim Ahmed stated that the Presidential Ordinance has been promulgated and it would be laid down before the National Assembly on Thursday (today).
Penalties have been considerably increased for smuggling of dollars, precious stones and jewelry under the said Ordinance.
Dr Hamid Ateeq Sarwar said that being a finance bill, there is no problem to pass it from National Assembly but keeping in view the requirement of Financial Action Task Force (FATF), the government has immediately promulgated Tax Laws (Second Amendment) Ordinance 2019.
Under the Ordinance, the FBR has divided currency carriers into different categories. Under the law, foreign currency up to $10,000 is allowed per person at time of departure from Pakistan, the ordinance proposes to confiscate foreign currency from $10,001 to $20,000. In case of foreign currency from $20,001 to $50,000, it seeks to impose penalty and imprisonment up to 2 years. In case of the foreign currency from $50,001 to $100,000, the penalty imposed could be 4 times of the confiscated amount and imprisonment would be up to 7 years.
If the amount of currency seized is over and above $200,000, penalty would be ten times of the value of currency and imprisonment would be up to 14 years.
With reference to the smuggling of precious stones and jewelry, on smuggling of 15 tola gold/jewelry, it will be confiscated and the equivalent amount of penalty could be imposed.
Dr Hamid Ateeq Sarwar said that penalties have been increased to bring these in line with FATF requirements. The same level of penalties was imposed by India and other regional economies in line with FATF conditions.
The FBR's Member Customs (Policy) Javed Ghani explained that certain legal changes were made into the Customs Act, 1969 through Presidential Ordinance.
(i) After section 3CC, the following new section is proposed to be inserted:-
"3CCC. Directorate General of Law and Prosecution: The Directorate General of Law and Prosecution is being proposed for the reason that in all the Collectorates and Directorates there are a number of cases which are framed for evasion of duty/taxes but owing to excessive work load and lack of expertise on the prosecution side the cases are not properly defended at subsequent legal fora. The Directorate General of Law and Prosecution will be established with specific power to handle legal issue and equipped with staff expert in handling legal issues.
(ii) The penal clause 47A of section 156(1) provides for fix penalty @ Rs 5,000 for initial five days and thereafter @ Rs 10,000 per day up to a maximum limit of Rs 100,000 in case GD is filed after ten days of the date of arrival of goods into Pakistan. This clause was inserted to realize stuck up government revenue as importers will suitably discharge their liabilities to avoid their penalties. However, a bonafide person needs to be excluded from this penal clause. However, the intent of the proposed amendment is to exclude the goods imported or received as gift by individuals without NTN or STRN through courier or air cargo, diplomatic cargo and imports made by government agencies.
"(iii) Changes are being proposed in section 156 to penalize persons carrying foreign currency. Previously, a person carrying foreign currency beyond the permissible amount of $10,000 was being prosecuted. It is now being proposed by means of varying slabs being taken by passengers ,ranging from $10,000- $200,000 and above and accordingly proposing varying degrees of penalties from a mere fine and then imprisonment up to fourteen years depending on the amount of currency apprehended by the authorities. Similarly slabs for smuggling of gold, platinum and silver have been proposed along with their varying degrees of fine and imprisonment depending on the quantum of precious metals.
"(iv) Owing to a surge in smuggling activities and knowing that smugglers as well equipped, it is being proposed that section 164 may be suitably amended empowering Customs officials to fire in the line of duty.
"(v) Currently, section 185A specifies the provisions for cognizance of offences by special Judges. It is proposed that a time period of six months may be fixed for the finalization of proceedings in criminal cases because cases keep on lingering without any outcome for years. No time limitation in decision of the case also accords time to the investigating officers to submit final challan without a time limit which aspect weakens the case as the time passed by.
"(vi) Section 194 of the Customs Act, 1969 provides for the constitution of a Customs Appellate Tribunal by the Federal Government which is competent to adjudicate upon appeals filed against orders passed by the Collector (Appeals). The said section specifies various pre-requisites for appointment as a judicial or technical member and empowers the federal government to appoint chairman of the Customs Appellate Tribunal. In order to complement revenue collection efforts by FBR, streamline the affairs of the Tribunal(s), bring about greater transparency in the manner of appointment of judicial and technical members of the Tribunal(s) and to impart greater efficiency in the working of the Tribunal for ensuring maximum disposal of cases it is proposed that in addition to the prerequisite as already mentioned, the qualification of Judicial Members may also be prescribed under rules made by the Prime Minister".
Furthermore, the constitution and functioning of benches and procedure of the Appellate Tribunal may be regulated by rules approved by the Prime Minister, the FBR Member Customs Policy added.