The All Pakistan Textile Mills Association (APTMA) has called on the Federal Board of Revenue (FBR) to revisit the newly proposed customs clearance system in consultation with industry stakeholders. APTMA has emphasized that the changes, if implemented without due consideration, could disrupt industrial operations, hinder exports, and negatively impact Pakistan’s economic landscape.
In a letter addressed to the FBR Chairman, APTMA Secretary General Shahid Sattar referenced a prior communication dated September 6, 2024, while outlining additional concerns. Sattar warned that the inefficiencies embedded in the new system would create severe bottlenecks for industries reliant on smooth customs processes.
According to APTMA, several critical issues require immediate attention:
1. The proposed system eliminates the prioritization of goods declarations (GDs) based on urgency, mandating a strict sequential processing approach. This change removes the flexibility needed to expedite industrial GDs crucial for uninterrupted production.
2. Even after completing primary queues, GDs may face prolonged delays in secondary queues awaiting principal appraiser review, compounding inefficiencies.
3. Misallocated appraisers handling specific items risk improper processing, such as incorrect duty enhancements or SRO deletions. Additionally, the lack of visibility for appraiser accountability exacerbates these risks.
4. Long queues outside assistant collectors’ offices are anticipated due to unresolved disputes, adding pressure to customs’ already constrained manpower.
5. Treating industrial imports on par with commercial imports fails to recognize the urgent need for expedited processing of essential industrial inputs.
6. Clearing agents are hesitant to file GDs due to increased risks, leaving clients to navigate unfamiliar procedures, further complicating the process.
7. The agent monitoring system, assigning 50 points per agent, creates unsustainable operational pressures, potentially leading to blocking.
8. Appraising officers and principal appraisers are reluctant to amend erroneous assessments, while assistant and deputy collectors avoid overriding decisions due to accountability concerns.
9. Excessive scrutiny by monitoring teams is discouraging appraisers from efficiently handling even straightforward GDs.
10. Utilization of the green channel has plummeted from 65% to 15%, resulting in congestion at ports and customs facilities.
11. Mounting demurrage and detention charges are placing additional financial burdens on industries, further jeopardizing their competitiveness.
“The cumulative impact of these issues will lead to delays in clearing industrial inputs, disrupt production schedules, and escalate costs for exporters,” Sattar stated. “In an already challenging economic climate, these procedural hurdles will undermine industrial competitiveness and export growth.”
APTMA has urged the FBR Chairman to urgently address these concerns in consultation with the industrial sector. Key recommendations include restoring prioritization for industrial GDs, addressing manpower shortages, and implementing robust accountability measures within customs operations. Immediate action is essential to ensure the new system facilitates rather than obstructs industrial and export activities, APTMA concluded.