ISLAMABAD: The documented steel sector, Monday, approached the Federal Board of Revenue (FBR) for immediate measures to associate customs value with international prices through LME (London Metal Exchange) on import and export of all metals and metal scraps.
In a presentation to Dr Muhammad Ashfaq Ahmed, chairman FBR, on Monday, Pakistan Association of Large Steel Producers (PALSP) has raised the issue of delay in linking customs value with internationally published prices on import and export of metals/metal scrap have throttled the industrialisation in Pakistan and encouraged misdeclaration in customs value and money laundering.
For and on behalf of large steel manufacturers, the PALSP would like to have meeting with the FBR chairman to report and outline well-aware underinvoicing menace that had thrived unabated because of illegal gratification acted as incentive.
Professional trade criminals have become well-organised and strong because of delays in implementation of effective counter measures by the federal government.
The foreign exchange ‘robbed’ through under invoicing in export is parked outside Pakistan and utilised in misdeclaration of customs value on imports to evade the national revenue.
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The industry stated that under invoicing or trade-based money laundering is being exploited by organised criminal groups and professional money launderers to facilitate myriad types of financial flows.
The disaster included creation of hostile trading environment; de-industrialisation; loss of foreign exchange FY 2020-21 over $255 million and loss of revenue FY 2020-21 over PKR two billion per month.
Through Finance Bill 2020-21 the federal government allowed Pakistan Customs to incorporate values from internationally-acclaimed publications, periodicals, bulletins or official websites of manufacturers or indenters.
On the request of the PALSP, the Directorate General of Customs Valuation issued valuation rulings linking customs value with MB for export of copper and import of metal scrap having copper content.
Metal Bulletin (now Fastmarkets) is an international publication that provides data in the light of transaction values between traders on import and export of metals and metal scraps. The prices published in Metal Bulletin are market-reflective assessing both the buy and sell side of transactions purely unbiased.
The association of customs values of copper/copper scrap with the LME prices published in Metal Bulletin through valuation rulings have provided a transparent platform for uniform assessment for all importers regardless of their category or sector.
The Metal Bulletin data has also helped Pakistan Customs to discover the actual composition of metal scrap and helped in effective determination of customs value. Perusal of trade data shows the significant improvement in collection of revenue and foreign exchange on exports.
The industry requested for immediate measures to associate customs value with international prices through LME on import and export of all metals and metal scraps.
Pakistan imports over six million tons of just metal scrap every year and even a small variation can cause loss of billions to the national exchequer, the industry added.
Copyright Business Recorder, 2021