ISLAMABAD: The Federal Board of Revenue (FBR) in collaboration with the Federal Investigation Agency (FIA) and the Nadra launched an ‘Automated Currency Declaration System’ for real-time capture of foreign currency declarations made by incoming and outgoing passengers at ports and airports.
Federal Minister for Finance and Revenue, Shaukat Tarin presided over the launching ceremony held at the FBR Headquarters on Tuesday as the chief guest. Chairman FBR/Secretary Revenue Division Dr Muhammad Ashfaq Ahmed, Chairman Nadra Tariq Malik, and DG FIA Sanaullah Abbasi were also present on the occasion. Under the new system, all incoming/outgoing passengers will declare foreign currency of any value with the immigration staff, which will automatically be connected to the FBR’s WEBOC system and State Bank of Pakistan (SBP) limit of US 60,000 would be easily captured.
The FBR has achieved another significant milestone towards automation and data integration in order to facilitate the taxpayers and the passengers flying in and out of the country.
Speaking to the gathering comprising of all FBR Members, dignitaries, senior officers, and media representatives, the finance minister congratulated the chairman FBR and his team for making this long-awaited initiative possible in a short period of time.
FBR set to regulate movement of foreign currencies
Tarin stated that the government is focusing on two important areas i.e. taxation and foreign exchange. Due to unknown reasons, we have never focused on the foreign exchange. “You can do anything under the Protection of Economic Reforms Act of 1992. On the other hand, the foreign exchange companies or brokers are very much independent”, he said. He said that there is no documentation of outgoing and incoming foreign exchange in the country. There are serious issues of transfer pricing, overinvoicing, and under-invoicing to the tune of billions. There are also issues of transfer pricing in petroleum products, which would be addressed through automation and technology.
He was surprised that nobody has taken notice of the situation that shipments are coming from China but invoicing is taking place from Dubai. What China has to do with Dubai within the context of shipments directly coming from China to Pakistan? Why payment is made through Dubai and why payments are not directly made from the China? The ships are directly coming from China. There is something fishy in the whole situation. The phenomenon has taken place for decades but nobody has taken any action. People have opened companies in Dubai only for this purpose of under-invoicing. Pakistan’s hard earned foreign currency has been compromised.
The FBR is investigating the issue thoroughly and with the help of technology, we will resolve the issues of transfer pricing, over-invoicing, and under-invoicing to the tune of billions, he added.
He stated that the government was focusing on the documentation of economy to broaden the tax base. “This aim can only be achieved through the use of technology and automation with review of existing procedures and processes,” he remarked.
He further added that inter-agency coordination and cooperation was sine qua non for the success of all efforts of business process re-engineering and adoption of new framework for implementation of rules and regulations. “To achieve the goal of documentation of economy and to bring more transparency in the economic transactions, documentation of flow of foreign currency in and out of the country is pivotal,” he continued. Presently, Currency Declarations (CDs) are obtained randomly from the passengers coming to or going out the country through airports. CDs are manually secured in shape of hard copies and are then entered into the system manually in batches. For millions of passengers coming in and going out from the country, it is an uphill task, especially, with very little resources in comparison with the challenges faced by Pakistan Customs and other Law Enforcement Agencies (LEAs). Since the current Currency Declaration System (CDS) was not working to achieve the goal of complete documentation of foreign currency movement, a new system was envisaged by FBR. This digital system was developed with the assistance of the Nadra and the FIA and will now be deployed at all International Airports, starting from Islamabad International Airport. “This new system will be a hassle free and time saving, one stop solution for all incoming and outgoing passengers,” the finance minister remarked.
The FBR is also working on securing data from banks and the State Bank of Pakistan (SBP) along with integration of currency exchange companies with POS. This will culminate into greater visibility and capturing information, which could then be used for analysis or audit purposes.
The data captured through POS and CDS will then be shared with all relevant agencies including the SBP, the FIA, Customs, IRS, etc, for further necessary action as per law. This end-to-end visibility of foreign currency market will bring a semblance of stability in the market and will also be instrumental in countering money laundering and currency smuggling. The Federal Minister for Finance and Revenue, later, formally launched the “Automated Currency Declaration System” by pressing the button. He commended all three government organisations–the FBR, the FIA, and the Nadra-for working in unison and kick starting this significant step. Earlier, the chairman FBR/secretary Revenue Division welcomed the finance minister on this occasion.
He explained the scope and significance of “Automated Currency Declaration System”.
He further reiterated that FBR had been swiftly moving to automation and digitization to promote transparency and reliability. In his talk, he explained the salient features of the “Automated Currency Declaration System” and added that the system would save time and ensure credibility.
He added that this digital intervention would also capture CDs data not only at airports but also at land border stations where immigration desks were available and IBMS (Integrated Border Management System) of FIA was working.
He reassured that the integration of IBMS and FBR’s WeBOC System for this new endeavour in active technical cooperation of the Nadra was the start of a new phase of cooperation among key agencies of the government and would pave the way for more collaborative initiatives in future. He particularly commended the Nadra and the FIA for providing much-needed support in materialising this digital intervention. These meaningful synergies and enduring collaborations will certainly contribute significantly to ensuring ease of doing business while, simultaneously, maximising tax compliance, he concluded.
Copyright Business Recorder, 2022
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