ISLAMABAD: Federal Board of Revenue (FBR) Chairman Rashid Mehmood Monday categorically declared crusade against corrupt customs officials hampering reforms in customs clearance operations and warned extreme action against officials of the Post Clearance Audit (PCA), who framed sketchy reports against Faceless Customs Assessment and leaked it to media.
Addressing a press conference here on Monday at FBR Headquarters along with top team of customs officials from Islamabad and Karachi, FBR Chairman said the Pakistan Customs Audit (PCA) report about revenue losses of Rs 100 billion in the aftermath of the implementation of Faceless Customs Assessment (FCA) was factually incorrect. It was stated that this PCA report was prepared by two officers who were superseded, and now an Inquiry committee was constituted to probe this report, its leakage to the media, fix responsibility, and take stern actions against them.
“After the implementation of Faceless Customs Assessment, the revenue has gone up based on the GDs (Goods Declaration). Certain elements want rollback of this system because now they are unable to clear their goods in a managed manner,” the Chairman FBR Rashid Mehmood Langrial, along with Member Customs Operation Syed Shakeel Shah and other senior officials of Customs, stated while addressing a press conference here at FBR’s headquarters.
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The FBR high-ups said that the tax officers’ categorization was in place for ascertaining their integrity, and it was used to grant promotions to the officers.
Tax authorities briefed the media for almost two hours as it was bifurcated into two parts as the Member Customs Operation along with his team shared the details of FCA and Pakistan Customs Audit (PCA) report and stated that it was found in the PCA report that 1006 GDs of restricted edible goods worth Rs 10.5 billion were cleared in violation of import policy order, implying that FCA allowed restricted without mandatory NOCs or certificates.
Now the factual position claimed by the FBR argues that in Pakistan Single Window, OGAs directly apply their regulations as goods are automatically blocked at the gate-out if no certificates are uploaded. The import handling of restricted items remains unchanged from pre-FCA practice. Scrutiny of all consignments confirmed that they were cleared in accordance with the import policy order compliance.
It was also told In the PCA report that the FCA overlooked gross under-invoicing of used cars and SUVs (3-5 years old), so FCA allowed trade-based money laundering (TBML) and led to incorrect fines for mis-declaration. It was cited that the land cruiser was cleared at Rs 17,000. The FBR high-ups said that Rs 42 million was collected in the shape of duty and taxes, and its value was assessed at its actual price and not on the basis of the declared invoice.
“The import allowed under the Gift/Residence scheme for overseas Pakistanis. The non-commercial imports mean no forex outflow from Pakistan or no TMBL risk as the transaction occurred outside Pakistan’s economic boundary. The duty/taxes are assessed on the notified valuation tables, not on declared invoices,” said the FBR official.
This scheme, he said, was in place for decades and the issue cannot be attributed to FCA at any account, said the official.
About the loss to revenues due to FCA, it was claimed in the PCA report that a Rs 30 billion loss was incurred by not framing contravention cases on every GD where additional revenue was assessed, another Rs 5 billion loss from miscalculation, valuation gaps, and inadmissible concessions.
The FBR high-ups say that the audit report shared with respective Collectorates for detailed review and scrutiny of results is expected. Where shortfall confirmed recoveries will be made as per law after completion of the audit cycle. The gaps identified will be used for system improvement, not just revenue recovery.
The PCA Claims of Rs 53 billion loss were incorrect, wrongly worked out by treating every valuation difference as a misdeclaration. The PCA’s Rs 1445 million valuation ruling gap was exaggerated as Collectorates found Rs 58 million potential.
The PCA report was leaked to the media before FBR’s internal review, creating public perception on FCA failure. The FBR has constituted an inquiry committee to identify and fix responsibility for the leaks, they concluded.
Copyright Business Recorder, 2025