KARACHI: Customs Collectorates in Karachi have recorded a steep shortfall of 25-30 percent in revenue collection in the month of April mainly due to imposition of unfair valuation guidelines at ports of the city. These guidelines were issued and implemented unilaterally by the collectorates without taking the stakeholders into confidence. Importers were completely left out of the process of issuing of the valuation guidelines. This speaks volumes about neglecting the taxpayers’ importance while deciding such core issues related to them.
Initially chambers and even political parties like MQM raised their voice against abrupt issuance of valuation guidelines without giving proper opportunity to the stakeholders to present their recommendations. But when there was no one to pay heed to the issue, these voices got suppressed over the time. The importers were left at the mercy of the courts.
On April 7, President of the Karachi Chamber of Commerce and Industry (KCCI), Abdullah Zaki, while expressing deep concerns over valuation guidelines on imported goods, said that the trade and industry rejects these unjust guidelines as such malpractices are being implemented with a view to harass the importers. He pointed out that importers are kept uninformed about the changes in valuation guidelines and due to fears of escalating demurrage/detention charges, the importers find no other option but to immediately clear the imported goods according to the value mentioned in valuation guidelines. The helplessness of these importers, who clear goods under valuation guidelines, is later on used as evidence by customs officials to convince others.
MQM’s Abdul Rasheed Godil while talking exclusively to Customs Today expressed his deep concern over discriminatory and unjustified 96-items valuation guideline on imported consignments at Karachi ports. He said that corruption and smuggling activities increased due to these guidelines and national exchequer suffered huge revenue losses.
The Constitution of Pakistan does not allow any citizen to be condemned without hearing. But the process of issuing ‘valuation guidelines’ does not have any provision where the stakeholders are heard, nor is there any provision of review/appeal so that the aggrieved party may be heard at least after any unjustified valuation guidelines. Appeal is also a fundamental right under the Constitution which a businessman is denied here. Hence, at the time when the collectorates did not listen to the stakeholders, they were left with no option but to press their fundamental constitutional rights in the court of law.
This has also given opportunity to lower customs staff to blackmail the importers that if their personal demands are not fulfilled, they send recommendations to their high-ups for issuing valuation guidelines. Since importers are not even called to give their viewpoints before such valuation guidelines, they are left with only two options: succumb to the blackmailing of the lower customs staff or close down imports. Some may have chosen the first option while some the other.
With such high-handedness and negligence of the whole importers community, imports are continuously on the decline and these businessmen are shifting their investments elsewhere. Hence revenues fell down to around 25-30% at Appraisement Collectorates (East & West), Karachi.
FBR must take notice of the situation at least now and take corrective measures to facilitate the business community and end their grievances regarding one-sided valuation guidelines. Valuation guidelines carry no legal status as these are issued on blank paper without signatures of any high ups. Also there is no provision regarding valuation guidelines in the Customs Act.
Business community requires respect, good environment and protection against unilateral change in policies. FBR may not be realizing this grave situation as they are sitting on the other side of the fence. But if revenue targets are to be achieved, Revenue Authorities and business community have to be on same page. If valuation guidelines were issued to boost revenues then the answer has already come with the steep shortfall in revenue, proving their unworthiness as well as illegality.