The Web based One Customs (WeBOC) is not just a software solution for Pakistan Customs automation and goods clearance, but it symbolises a complete home-grown solution for the import and export trade and transport corridor of the country.
The successful development and deployment of WeBOC by the Federal Board of Revenue as pilot in April 2011 and rollout in December / January 2012 is a testimony to the fact that Pakistan Customs is determined to stand on its feet and provide seamless movement of goods across the country's borders, whether they be imports or exports of the country. This system has saved 100 million dollars (around 9 billion rupees) in foreign exchange. Moreover there is no dependency on foreign entity which makes it difficult to make frequent changes. The development team has made almost 300 changes in the software in last few months on the request of internal and external users to make system fool proof, facilitative and user friendly.
WeBOC is operational at Port Qasim and two container terminals in Karachi ie the Pakistan International Container Terminal (PICT) at east wharf and the Karachi International Container Terminals (KICT) at west wharf. The increasing volume of trade and the limited human and financial resources available with the Pakistan Customs department requires an efficient use of resources. WeBOC, therefore, operates on the principle of risk management; diverting resources from unnecessary activities to focusing on defining and pre-empting rich for achieving the two pronged goal of revenue protection and trader facilitation.
WeBOC is a customs computerized system which works in paperless and fully automated environment. The shipping agents file vessel information report on line. Similarly the traders are filing goods declarations and documents (after scanning) electronically. The system checks the documents on the basis of Risk Management System (checks 60-70 different risks).
If any no discrepancy is found the consignment is cleared under Green channel and the trader instantly gets a message to lift consignment is sent to Assessing Officer's (AO) computer for assessment (Yellow channel). The AO neither can view name or address of the trader nor contact him. All documents follow queue (first in first out). He assesses and intimate duty and taxes to trader. If he agrees he can make payment or can file review to next two authorities online or can plead his case in person. Certain consignments are sent for examination (Red channel).
Presently the system clears 25% consignments in Green channel, 55-60% in Yellow channel and 15-20% in Red channel. In previous manual system 100% examination was used to be conducted. The percentage of Green consignments shall be increased once few functionalities are complete (like valuation module, post clearance audit module - both partially implemented).
Pakistan Customs has traditionally faced a complex web of functions which involve revenue collection, enforcement of national and international laws, treaties and agreements, regulating import and export trade policies and protecting the supply chain for businesses by bringing down non-tariff barriers and facilitating goods clearance. It always has to find a balance between facilitating genuine trade and catching fraudulent transactions. The chain of taxation starts and ends at the borders; be it customs duty, sales tax, income tax, federal excise duties or any other levies collected at the import and exports stage by the (surcharges, cess etc) Federal Government. In addition, an extensive exemption and concession regime of the government for protection and development of domestic trade and industry adds further complexity to the customs enforcement measures. Pakistan customs is presently facing two big challenges: one, misuse of exemptions/concessions and two, under valuation. In WeBOC, Pakistan Customs has made use of latest technology and the automation of customs business processes to develop an Integrated tariff structure. Work, on linking the import/ export trade policies, all statutory regulatory orders (SROs) for duty exemptions and concessions, and the sales tax, income tax and federal excise duty exemptions, with the tariff codes and the Income Tax (NTN) database, has been completed. After binding Pakistan Customs Tariff (PCT) codes with the goods on the restricted or controlled lists of import / export policies, or those attracting benefit of exemption/ concession under any notification (SRO) or subject to different rates of taxes for various categories of traders, like manufacturers or commercial concerns, under any tax laws of Pakistan, the computer system does not allow to get undue benefit or evade taxes.
The customs valuation of goods which plays a central role in the correct assessment of taxes, involves an extensive valuation regime reliant on a database of prices in the international market and domestic price determination by the Directorate of Customs Valuation, which notifies values through valuation rulings and advices. The computer system cannot read description. Moreover, if rulings cannot be linked with PCT codes as numerous items with different brands, origins, suppliers, qualities are imported under one heading. It has therefore been decided that each item may be given 12 digit code (present codes are at 8 digit level). For this purpose appropriate changes have been made in the law. Work is in progress to convert valuation rulings to 12 digit codes structure and link them electronically with the PCT codes so that valuation ruling/ advice cannot be bye-passed.
Beside this initiative, initial work on linking the Pakistan Customs Tariff with international commodity databases like the London Metal Bulletin, Plastic Scan, POL prices, edible oil prices, public ledger, dongle key (Chinese origin goods) etc has also been started. Presently the values are available at valuation gate way (customs site) but in PDF format, which is not in system readable format.
Pakistan Customs is in the process of developing electronic links with other government enforcement and regulatory bodies for real time information sharing and surveillance activities related to fraud monitoring, drug smuggling etc the Anti-Narcotics Task Force (ANF), the Inland Revenue Service (IRS), Excise and Taxation Department, Government of Sindh, the local drug enforcement unit working under the umbrella of United Nations Office of Drug Control (UNODC), the Directorate of Customs Intelligence, have already been electronically linked with the WEBOC system. Initial work has also been completed for linking the system with the State Bank of Pakistan, Commercial Banks for issuance of export authorisations and e-payment, Pakistan Standards and Quality Control Authority (PSQCA) for issuance of quality assurance certificates, the foreign office for on line submission of exemption certificate for diplomatic imports, NADRA, International Air Travel Association (IATA), renowned laboratories for testing of goods like PSCIR, HEJ etc and many others.
A dedicated team of customs officers and FBR's internal IT company (PRAL) is working full time to make the WeBOC a complete customs solution. Software modules for customs functions like assessment, examination, carrier declaration, valuation, post clearance audit, baggage, refunds, rebates and many others have already been completed and deployed. The e-payment module shall be operationalized in 10 days time. RSDs for modules like e-auction, warehousing, transit, transshipment have been completed and its development is under way.
The WeBOC has been designed in such a way to make it Customs Single Window. FBR is co-ordinating with other ministries to take up this project as National Single Window also. In future all airlines, shipping lines, transporters, different ministries shall be linked so that a trader can book his cargo, get it cleared from customs/ port and get at his premises without physical interaction. On completion of this mega project, it will not only change the face of Pakistan Customs but bring about a revolution in the business supply chain management and economic activities of the country through the facilitation of trade and enhancement of government revenue.
(The writer is Director Automation (WeBOC) / Risk Management Unit.)