The Federal Board of Revenue (FBR) and the State Bank of Pakistan (SBP) are working on a new system, ie, Electronic Data Interchange (EDI) between banks and customs department for online verification of import documents including Letters of Credit (LCs) etc to check under-invoicing.
Sources told Business Recorder here on Sunday that the FBR is ready to take some major steps to check the menace of under-invoicing. The Board has started deliberations for information sharing with regulatory authorities in this connection. "Negotiations have already been initiated with the State Bank of Pakistan for developing Electronic Data Interchange (EDI) between banks and Customs department for online verification of import documents like LCs and sales contracts to check under invoicing", sources said.
According to sources, the FBR and the SBP had constituted a committee comprising experts including a Collector of Customs Karachi and a Director of the SBP for finalising the EDI between banks and customs department for online verification of import documents. Currently, if an importer seeks low-valued invoices (under invoicing) then customs department do not have cross matching mechanism for determining the actual value of imports. Whereas, once this electronic interchange of LC information is arranged between the customs and the SBP, the customs department would be in a better position to instantly cross match the invoice value vis-à-vis its LC value. This arrangement would result in controlling the under-invoicing and hence result in increased revenue not only in the form of customs duty but also sales tax and income withheld at the import stage.
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