Facilities for importers under ATTA: government asked to approach Pakistani banks in Afghanistan

Institute of Cost and Management Accountants of Pakistan (ICMAP) has asked the government and the Federal Board of Revenue (FBR) to approach Pakistani banks in Afghanistan to provide facilities to the importers under the banner of Afghan Transit Trade Agreement (ATTA).
Afghanistan Transit Trade (ATTA) being practised in the country is actually distorting infiltrating the culture of border crossing in the country at the cost of the national exchequer, Vice President (VP) ICMAP Mohammad Hanif Ajari propose the government and the FBR in a budget for the federal budget 2010-11.
There is a need to renegotiate the agreement with the proposed measures which can reduce excess quantities of imports normally directed for Pakistan, he said. The vice president proposed that renegotiations of the treaty should incorporate enabling clauses to protectt national economic interest.
In the interim period some of the measures allowed under the existing (1965 agreement) be enacted, these includes reintroduction of the negative list for ATTA, especially for raw materials for which no industry exists in Afghanistan and for consumer items for which the demand conditions in Afghanistan may not justify the large quantities being imported by Afghanistan. As was the case till 1996, only those shipments are allowed under the ATTA for which a valid Letter of Credit (LoC) has been opened. Pakistani banks in Kabul can be approached to provide facilities for the Afghan importers.
FBR be empowered and made responsible for ensuring that the goods intended for consumption in Afghanistan are not sold in the domestic market. He said the government can consider adopting "revenue neutral" measures for smuggling prone products whereby varying combination of various duties, levies or taxes the incentive for smuggling is reduced to be minimal.
To control malpractice of under invoicing, which is giving an exponential loss to the national exchequer, the government should allow depending on industry input, values should be fixed for import consignments, basis of valuation be origin, weight, volume, he said, adding items prone to under invoicing and miss-declaration, FBR designate one or two ports (including the dry ports) for clearing of import of consignments, would allow better monitoring of import consignments.
He said values at which import consignments are cleared whether through PRAL or CARE needs to be public information. To protect, confidentiality name of the supplier may be withheld and old Customs General Order 25 needs to be revived. "It may allow local manufacturers the option to buy at a 10 percent premium any consignments which appeared undervalued, adding sales tax and Federal Excise Duty deposited by local manufacturers should be published as was in the past."
He further suggested that the rate of withholding tax import of finished goods, goods sold in the condition in which they are imported to be 50 percent of that for the commercial, non-corporate importers. The corporate entities may be allowed the option to file returns under the normal tax regime or they opt to file under the normal tax regime, the withholding tax deducted to be adjustable, he added.