Home »Taxation » Pakistan » Budget (2017-18): government may grant anti-smuggling powers to DGI&I IR

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  • May 12th, 2017
  • Comments Off on Budget (2017-18): government may grant anti-smuggling powers to DGI&I IR
On the pattern of powers delegated to Law Enforcement Agencies (LEAs), the government may grant anti-smuggling powers to the Directorate General of Intelligence and Investigation Inland Revenue (IR) in budget (2017-18) to check smuggled & foreign counterfeited cigarettes.

Sources told Business Recorder here on Thursday that the Federal Board of Revenue (FBR) is considering different proposals of the Inland Revenue Enforcement Network (IREN) - a special task force of Federal Board of Revenue (FBR) for coming budget. At present, anti-smuggling powers have been delegated to the law enforcement agencies (LEA) without analysing any data or outcome of performance of LEAs in checking smuggling of cigarettes at borders. However, keeping in view the remarkable performance of Directorate General of Intelligence and Investigation Inland Revenue, powers may be extended to the said directorate of IR on the pattern of LEAs, sources said.

A meeting of IREN was held at Directorate General I&I-IR Islamabad attended by all the stakeholders/members. In the said meeting all relevant aspects of combating illicit trade of cigarettes/tobacco was discussed threadbare and decisions were communicated by IREN for further necessary action by the concerned wings of IR at FBR. The Inland Revenue Enforcement Network recommended to do away with Section 40B of Sales Tax Act 1990 from the local cigarette manufacturing units as the same has become toothless and futile. Currently seizures of non-tax paid cigarettes are being jeopardised because of department''s inaction against the officials whose presence fails to forestall clearance and transportation of non-tax paid cigarettes. It is further proposed that this action needs to be invoked for monitoring at GLT (green leaf thrashing) Units.

In line with the Board''s existing policy of delegation of enforcement powers to various law enforcement agencies, similar delegation of anti-smuggling powers to Directorate General I&I-IR, with specific reference to smuggled & foreign counterfeited cigarette may be considered in the forthcoming budget, it recommended.

The Board is requested to review the existing mechanism of auctions of seized smuggled cigarette by customs department against the payment of duty/taxes. Currently this regime is being grossly misused and on the strength of paltry amounts paid against auction certificates, huge quantities of non duty/tax paid cigarette is being sold in the market. The Board may like to ascertain the volume of revenue currently being raised under this head. If the amount is negligible then all such stocks may be outrightly confiscated for destruction. In case substantial revenue is involved then foolproof certification mechanism is to be put in place, whereby cigarette-specific auctions be properly documented and linked with stock taking - this system would help ensure that auction and onward sales are equal.

The Inland Revenue Enforcement Network recommended hiring of suitable premises/buildings to be used as warehouses for confiscated tobacco/cigarettes. Custom authorities are requested to provide data to IREN regarding the import of cigarette paper & filters to determine exact manufacturing capacity of registered manufacturing units and also to unearth differential number, it recommended.

Adequate workforce shall be provided to Directorate General of Intelligence & Investigation-JR to ensure proper monitoring of cigarette/tobacco sector, it recommended.

The Inland Revenue Enforcement Network recommended that funds for weapons & bullet proof jackets may be provided to raiding teams in order to ensure their safety and security in case of resistance from the other end, sources added.



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