CPEC projects will start contributing in revenue generation: Haroon

Special Assistant to the Prime Minister on Revenue, Haroon Akhtar Khan has conveyed to the collectors of customs that the China-Pakistan Economic Corridor (CPEC) projects will start contributing in revenue generation of the Federal Board of Revenue (FBR).
According to the decisions of the last collectors of customs conference communicated by the FBR to the Model Customs Collectorates (MCCs) here on Friday, the said views on CPEC have been made by Special Assistant to Prime Minister on Revenue Haroon Akhtar Khan during the conference.
The FBR's instructions said that Haroon Akhtar while addressing the customs collectors highlighted the policy of the government in respect of FBR being squarely based on merit which has helped build a positive image of the FBR. He appreciated the fact that the officers of FBR have been selected through a merit-based system and therefore, they have not only the authority but also responsibility to fulfil the tasks assigned to them by the government.
He expressed that the role of customs in revenue generation is very crucial with special reference to collection of sales tax, federal excise duty (FED) and withholding tax (WHT), besides customs duty. The role of anti-smuggling operations for the protection of the economy and the need to curb the phenomenon of under invoicing was also emphasised. He stressed, "The challenge this year is uphill as we are not performing at the level of previous year." He highlighted that factors responsible for this situation of revenue collection are lower rates of sales tax on POL products, reduction in the rate of sales tax on the import of urea fertilizer and the zero rating of export-oriented sectors. He indicated that in the medium to long run, the CPEC projects will start contributing in revenue generation. He appreciated the performance of MCC Faisalabad and Peshawar and expressed his expectation for even better performance by all collectorates in the coming months.
The FBR member (customs) appreciated the field formations for achieving the targets of customs duty for first seven months of 2016-17. Similarly, anti-smuggling efforts of the Directorate General, Intelligence & Investigation and Collectorates of Peshawar, Quetta, Gwadar, and Preventive Karachi were commended. However, he indicated that the reasons for shortfall in collection of sales tax and FED at import stage need to be examined. He also emphasised the need to plug any leakages in revenue collection due to malpractices and negligence and cautioned the participants about the steeper targets for 201 6-17 which require dedicated efforts on part of the field formations. The member (customs) assured full co-operation of the customs formations of the new chairman and expressed that under his leadership all the targets assigned to the FBR will be achieved.
Chairman FBR Dr Muhammad Irshad highlighted the importance of holding such conferences which provide opportunity of learning from one another through exchange of views on important matters. He appreciated that customs duty collection has registered a growth of more than 20% in current financial year and urged that the collection in sales tax, withholding Tax and FED ought to show the same level of growth in the coming months. He further highlighted the importance of areas like audit, recovery of arrears, stuck up revenue in litigation, etc, for enhanced revenue collection. The chairman assured the participants of resolving the issues of promotion, shortage of vehicles, and creation of new collectorates, etc, and encouraged the participants to come up with proposals to this effect.
The FBR chief (tariff & trade) gave presentation on the targets assigned to the customs wing by the FBR, the revenue collected so far and the task ahead. While discussing various issues the SA to the Prime Minister expressed his concern on the low growth in the collection of sales tax at import stage.
It was noted that collectorates of the central region (excluding MCC, Faisalabad) and MCC, Peshawar in the north region could not achieve the assigned targets mainly due to lower import values on account of levy of infrastructure development cess by the provincial governments of Punjab and KP.
As far lower collection of sales tax at the import stage, the reasons highlighted were the decrease in the rate of sales tax on POL products, urea fertilizer and pesticides, exemption of sales tax on import of laptop/ PCs and zero rating of export-oriented sectors. However, MCC (Appraisement-West), Port Qasim, Quetta Faisalabad, and Gilgit-Baltistan were able to achieve the targets of sales tax assigned to them, the FBR said.
The collectorates highlighted multiple issues eg limited mobility due to old and used vehicles and shortage of human resources, determination of values on higher side by the Directorate General of Customs Valuation, especially in respect of goods generally imported through land routes, and the development of missing modules of the customs computerised system (WeBOC). For improved operational efficiency and anti-smuggling effectiveness, the participants proposed establishment of four more preventive collectorates in Khyber Pakhtunkhwa, Balochistan and Karachi, FBR added.