The Federal Board of Revenue has observed that the absence of an effective Risk Management System (RMS) for clearance of imported consignments at the Pakistan Customs Computerised System (PACCS) is causing huge revenue loss to the exchequer.
The FBR has also directed the customs authorities to immediately take all administrative steps to control leakage of revenue through clearances systems. In this connection, the FBR has issued instructions to the Chief Collector of Customs (South) to submit a detailed report on the revenue loss due to outdated RMS on top priority basis.
Sources told Business Recorder on Monday that the issue of RMS was discussed in detail during a presentation of the Chief Collector of Customs South to FBR Chairman Ahmed Waqar at the board''s headquarters. It was informed that the risk management system was implemented in 2005 containing basic ingredients of risk profiling of importers. Over a period of time, the system was not regularly updated.
It has been detected that it is not a perfect system, which needs to be reviewed. It was also proved that the system is not accurately working. In certain cases, consignments, which were not required to be cleared due to high-risk, were cleared through ''green channel'' by the system.
The profiling of importers was done on the basis of risk based system for clearance of consignments on the basis of high-risk or low risk criteria. The risk factors like country of import, trends in import, item specification/origin and importers past track record etc needs to be updated on regular basis for implementation of thorough risk management system. It is necessary that the risk management system should be updated in view of past importer''s profiles.
As a result of presentation, the board has now issued directives to the concerned Chief Collector to review the entire system for estimating revenue loss. The purpose of the whole exercise is to ensure proper collection of the duties and taxes on the import of goods through a risk management regime.
According to the FBR instructions, it was informed by the Collector MCC (PACCS), during the presentation, that the Risk Management System has become static and predictable. The system is unable to mark a particular National Tax Number (NTN)/trader for mandatory check, as new risks identified over since inception of RMS need to be incorporated in the system. The RMS is non-existent since its inception and supplier based risk indicators need immediate updating.
In this regard, it is pertinent to inform that the FBR has already constituted a RMS Committee for monitoring the performance of RMS in both PACCS as well as "One-Customs" clearance systems.
Chief Collector of Customs South should immediately respond to the queries of FBR: Firstly, the Board may be informed whether such RMS committee has ever met and if met than forward the minutes of such meetings to the Board. Secondly, Board may be communicated revenue loss occurred on account of non-functioning of RMS. Thirdly, whether RMS committee is regularly monitoring the performance of RMS as per its mandate. If not than what are the reasons and further what appropriate action the RMS committee is going to take in future to address the problems in RMS of PACCS, the directive said.
The FBR has further directed the concerned Chief Collector that all administrative actions may be taken whether in the automated environment or any other mode to safeguard the government revenue, which seems to be at high loss due to absolutely unsatisfactory RMS. The credentials of Project Team managing the RMS have become a big question mark, therefore, Board expects a full appraisal of the efficacy of the team members and make recommendations about them. A comprehensive report on these issues may be sent to the Board within a week, FBR directive added.