To curb the flow of smuggled goods, the Central Board of Revenue (CBR) has proposed replacing of the Afghan Transit Trade Agreement (ATTA) with a bilateral convention. Simultaneously, legal changes in the Customs Act, 1969, Prevention of Smuggling Act, 1977, and withdrawal of illegal taxes collected by Political Agents in the Federally Administered Tribal Areas (FATA) and Provincially Administered Tribal Areas (PATA), are also in the offing.
It is learnt that these legal amendments will be introduced in the coming budget for 2005-06. Official sources told Business Recorder on Wednesday that the transit trade agreement between Afghanistan and Pakistan, signed in 1965, did not contain any provision to curb the flow of these goods back into Pakistan, after reaching Afghanistan. A World Bank (WB) study confirmed that over 80 percent of the goods allowed transit to Afghanistan are smuggled back into Pakistan.
According to CBR, there is a need to replace the transit trade agreement with a bilateral agreement with the neighbouring countries for active co-operation in exchange of information and stoppage of smuggling across the borders, as per ''Revised Kyoto Convention''. At present, the neighbouring countries, including Afghanistan, consider the smuggling of goods from these countries to Pakistan as part of bilateral trade through the non-notified routes.
The CBR pointed out that there was need to revise the transit trade agreement on the lines of the agreement between Nepal and India.
On the issue of definition of ''smuggling'' given in Customs Act, 1969, the CBR said that the term is defined under section 2(s) of the Customs Act, 1969, read with the provisions of Prevention of Smuggling Act, 1977. This definition is confusing as well as complicated, and the judicial fora have interpreted this definition in a way where existing provisions of law can no longer be considered as a deterrence against the menace of smuggling. The CBR has proposed to re-draft the legal provisions pertaining to anti-smuggling to create an effective deterrence against smuggling.
The Prevention of Smuggling Act, 1977 empowers attachment, seizure and confiscation of all types of property held in the name of smugglers or their relatives. Since the promulgation of this Act, there has hardly been such a case. There is need to conduct a study to introduce suitable amendment in the Act for enforcement of the provisions.
The CBR further said that the scope of Customs Act, 1969 was extended to FATA and PATA long ago. However, the Political Agents, who have been entrusted with customs'' powers, hardly enforce the same in FATA/PATA. On the contrary, the political officials in these areas allow a free flow of smuggled goods against collection of a token/negligible amount of illegally imposed tax per mule/ horse/camel/wagon/truck. There is an immediate need to remedy the situation.