FRIDAY SEPTEMBER 30: FBR collects Rs 42 billion as customs duty in first quarter

ISLAMABAD: The Federal Board of Revenue (FBR) has collected nearly Rs 42 billion as customs duty during the first quarter (July-September) 2011-2012 against the quarterly target of Rs 40 billion, reflecting an increase of Rs 2 billion. On the conclusion of the National Assembly Standing Committee on Commerce here on Thursday, a senior FBR official told Business Recorder that the FBR would be able to cross the figure of Rs 42 billion during period under review against the target of Rs 40 billion.
The customs duty collection during first quarter would enable the FBR to meet the overall revenue collection target of Inland Revenue during first quarter of 2011-2012. Responding to a query, official said that there is a need to reduce the standard rate of sales tax and customs tariff for overall reduction in the incidence of taxes on the imported items to check smuggling by encouraging legitimate imports.
Only reduction in customs duty would not help in effectively checking smuggling of goods. In this regard, the higher rate of sales tax also needs to be brought down. Along with the overall tariff rationalisation on major smuggling prone items, the reduction in the sales tax rate would have an accumulative affect on the incidence of duties and taxes on smuggling prone items.
Mere reduction in the customs duty rate would not be instrumental in controlling smuggling. However, the overall duties and taxes on the imported goods need to be brought down for reducing cost of the legitimate imports. To check smuggling, the cost of documented imports should be low to ensure that the people should prefer formal regime.
When asked about maximum rate of tariff, official said that the overall customs tariff slabs should not be higher than 25 percent and there is need to revise customs duty under the Pakistan Customs Tariff, keeping in view the ongoing rationalisation plan exercise.