The Federal Tax Ombudsman (FTO) has ruled the requirement of forensic test was compromised on the payment of illegal gratification in certain Customs Collectorates and amnesty to smuggled vehicles cannot be justified as it causes more harm than good to the national economy.
Sources told Business Recorder here on Sunday that the FTO annual report of 2013 has highlighted the financial scam of Customs department in the performance review of FTO office wherein it is held that if this opportunity is missed to effectively handle the mismanagement, misuse and corruption involved in the smuggled vehicles amnesty scheme-2013, the possibility of remodelling the mindset of revenue collection machinery on the basis of efficiency and integrity would be lost irretrievably.
When contacted, a Lahore based tax lawyer Waheed Shahzad Butt told this correspondent about the special initiative of the office of the FTO wherein landmark remarks have been issued by the FTO. Amnesty to smuggled vehicles cannot be justified as it causes more harm than good to the national economy in ways more than one. Considerably more generous tax and tariff concessions were granted to smuggled vehicles as compared to old and used vehicles imported by overseas Pakistanis. Even the requirement of forensic test was compromised on the payment of illegal gratification in many Collectorates which did not refer any vehicle for forensic lab test.
Waheed further added that the scheme falls Customs mega scams category, such as - Container Scam at Port Qasim Karachi (2006-2008), Transit related 26 Container Scam at Port Qasim Karachi, Transit Related 52 Liquor Container Case and Transit Related 7922 ISAF Container Scam at Karachi Port (2007-2010) unearthed by FTO Dr Muhammad Shoaib Suddle.
The FTO annual report states, "Revenue Division notified amnesty for smuggled vehicles vide SRO 172(I)/2013. Considerably more generous tax and tariff concessions were granted to smuggled vehicles as compared to old and used vehicles imported by overseas Pakistanis. Instead of packaging guidelines for orderly implementation simultaneously while notifying the amnesty, the FBR haphazardly issued piecemeal instructions on different occasions during the amnesty period. This caused a lot of mismanagement in implementation of the amnesty.
The failure of the FBR to package the requisite guidelines for orderly implementation of amnesty across the country prompted mismanagement and abuse of the amnesty and triggered a lot of public criticism. The overseas Pakistanis decried discrimination. The media highlighted the ravages of smuggling. The Competition Commission of Pakistan (CCP) sent a scathing Policy Note to the Revenue Division/FBR on the adverse implications of amnesty for local auto-industry. The FTO took own motion notice of allegations of corruption and maladministration.
Taking the notice of the allegations of maladministration involved in conceiving and implementing the amnesty, the FTO constituted joint inspection teams of senior officers of the FTO Secretariat and FIA. These teams visited the Customs Stations of their assignment and discovered that most of the Collectorates had observed the FBR''s guidelines more in violation than in compliance. Most of these teams confirmed allegations of mismanagement and corruption in regularising the smuggled vehicles. Hardly any Collectorate, visited by the FTO''s inspection teams, had duly recorded amnesty data in real time and properly maintained its record.
Evidence was received by the FTO Secretariat indicating grant of amnesty to vehicles which were still in the Auction Houses of Japan. It was also observed that applicants belonging to far off places in Khyber Pakhtunkhwa and Balochistan provinces got vehicles regularised at Customs Stations Karachi, Faisalabad, and Sambrial (Sialkot) and applicants of the Punjab province got amnesty at Collectorates of Peshawar, Quetta and Karachi. The amnesty data is riddled with examples of applicants getting amnesty of more than 10 vehicles on one CNIC in far off Collectorates. In some cases, 10 to 53 smuggled vehicles were regularised against one CNIC.
These facts clearly lend credence to the public outcry that a significant number of vehicles granted amnesty by many Collectorates were not physically presented to the Customs staff as required under the amnesty scheme. As compelling evidence of mismanagement and abuse is available particularly in respect of unlawful grant of amnesty to Ghost Vehicles, the Customs staff responsible for these irregularities needs to be taken to task.
The FTO Secretariat made an earnest attempt to highlight the extent and magnitude of mismanagement and abuse of the smuggled vehicles amnesty scheme-2013. The upshot of the FTO''s investigation is that amnesty to smuggled vehicles cannot be justified as it causes more harm than good to the national economy in ways more than one. The Revenue Division needs to get the identified areas of alleged maladministration and corruption investigated for reconfirmation and fixation of responsibility. If this opportunity is missed to effectively handle the mismanagement, misuse and corruption involved in the smuggled vehicles amnesty scheme-2013, the possibility of remodelling the mindset of revenue collection machinery on the basis of efficiency and integrity would be lost irretrievably: FTO report added.