FBR reply sought: FTO takes cognizance of GB customs scam

ISLAMABAD: The Federal Tax Ombudsman has taken cognizance of the GB customs revenue loss scam and has reportedly directed FBR to submit its reply to the whistleblower ex-collector GB’s allegations against the custom officers and officials allegedly involved in the scam.

Sources said that the PCA had submitted in FBR an interim audit report on the GB Customs revenue loss scam. The Post Clearance Audit is largely a toothless audit wing of FBR which had never been allowed to grow to its full revenue loss detection potential in the last two decades.

The PCA has reported in its interim report that the revenue collection at Sust Dry Port increased by 30% during the last season – April to November, 2022 – which the whistleblower former collector GB had earlier attributed to his own untiring revenue building efforts amidst corruption and massive money making by the corrupt custom officials.

However, sources added, PCA fell short of doing the task of confirming the truth of former GB collector’s corruption allegations and fixing responsibility for revenue losses caused in the scam as it had not been mandated to touch and accomplish these tasks.

Sources said that PCA’s mandate was restricted to only post clearance audits in a bid of the senior custom to salvage the officers and officials involved in the scam from any legal proceedings.

Sources disclosed that in its interim audit report, PCA touched the custom officers’ most sensitive nerve when it recommended improvement in the custom declarations of imported goods filed before the custom officers.

Sources further disclosed that most of the custom declarations of commercial imports filed before custom officers were made vaguely, incompletely and on the basis of fabricated, forged and locally made invoices.

Surprisingly, the custom officers from bottom to top not only entertain such locally made forged invoices and encourage this wide spread modus operandi of valuation fraud in the country’s revenue administration but also leave aside and ignore the proper implementation of a provision of customs law which requires recovery of actual and true invoice from the import container and provides for a prohibitive penalty of fifty thousand rupees in case of non recovery of invoice.

The customs officers have made this penal provision against valuation fraud meaningless and ineffective by reducing the penalty for non discovery of actual invoices from the import containers to a non prohibitive level of just five thousand rupees.

Sources said that It was this massive illegality in customs declarations of imported goods which the PCA had pointed at in its interim audit report.

Had the PCA made its recommendation for improvement in custom declarations of imported goods in clear and so many words, it could have faced the same wrath and revenge from FBR which the whistle blower ex-collector GB Nisar Ahmad had to experience after his public interest disclosures on the GB customs scam.

Sources revealed that FBR lost Rs600 billion in duty and taxes annually in Karachi alone due custom declarations made on the basis of locally prepared forged invoices and the custom officers’ massive money making from their collusion in this valuation fraud.

Sources said that what FBR has said in its response submitted before the FTO is just a circumvention of the real issues involved in massive revenue losses caused in the GB customs.

What FBR would never like to tell the FTO is it’s illegality defined as maladministration by way of its punishing the whistle blower collector in contravention of the express whistleblower protection provisions of Public Interest Disclosure Act, 2019.

It is worth noting that intimidated by FBR’s actual and still more threatened action against ex collector GB and to soften the FBR’s behaviour in the matter, the whistle blower collector has dropped his allegations against the DG customs Intelligence but has gathered the courage to stand by the rest of his corruption allegations in GB customs communicated to member custom operations of FBR a month ago.

On query of this scribe, Member Custom Operations Mukaram Jah Ansari told that PCA’s final audit report was awaited but took a novel  position at the same time that it was not his but was member admn’s  jurisdiction to proceed against the culprits of GB customs scam.

 

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