KARACHI: An alarming tax evasion scam has been detected by Directorate Post-Clearance Audit (PCA) South, revealing systematic fraud by importers misusing export promotion scheme SRO 492, costing Rs 27.5 billion to the exchequer.
Investigations revealed that around 1,268 importers fraudulently claimed duty/ tax exemptions during a period 2014-2022 on imports worth Rs 27.5 billion but failed to re-export these goods, violating SRO 492 directives.
According to the details, the SRO 492 concession allows importers waiver of taxes if imports are re-exported within 18 months.
However, PCA South’s audit revealed that this compulsory export condition was not fulfilled by these importers, confirming deliberate denial of revenues for customs department.
Of the total 1,268 importers, 764 importers are located within the jurisdiction of PCA South, another 645 are overseen by PCA Central, and the remaining 164 fall under the scope of PCA North. This indicates systemic misuse of the scheme across Pakistan that cost exchequer billions over the years.
Sources confirmed PCA South had referred cases to respective wings for legal action against fraudulent importers, including encashment of security deposits made during imports filing.
DG PCA Chaudary Zulfiqar and PCA South Director Sheeraz Ahmed lead robust efforts for early conclusion of proceedings to penalise wrongdoers and retrieve unpaid government dues.
“The stern action sends a strong signal to traders for compliance with customs regulations,” tax experts said and stressed the need for policy reforms in export schemes prone to such large-scale frauds undermining country’s revenues amid economic challenges.
“Thus PCA South has done a commendable job to identify a mega scandal that permitted importers years of unpaid duties through procedural exploitation. But long-term solutions should discourage fraud-friendly incentives that did nothing but a financial haemorrhage to the national kitty,” they maintained.
Copyright Business Recorder, 2024
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