ISLAMABAD: The Federal Tax Ombudsman (FTO) has directed tax authorities to launch country-wide crackdown against smuggled vehicles.
This comes after reports revealed the presence of more than 200,000 non-duty paid vehicles circulating in Malakand Division and adjoining areas of Khyber Pakhtunkhwa (KPK).
In an own-motion investigation initiated under Section 9(1) of the Federal Tax Ombudsman Ordinance, 2000, the FTO took cognizance of the issue and urged the Federal Board of Revenue (FBR) to collaborate with law enforcement agencies and devise a comprehensive plan to seize all smuggled vehicles, except those registered with local authorities in FATA/PATA before June 30, 2018.
The FTO directed Chief Enforcement, FBR Customs (focal person) to coordinate with Inspector Generals of other Law Enforcement Agencies (LEAs) and police to ensure effective implementation of the Customs Act, 1969. The focus of the crackdown is to seize non-customs duty paid (NCP) vehicles plying nationwide.
Chief Collectors of Customs and the Director General Intelligence & Investigation have been instructed to launch a special countrywide Customs Anti-Smuggling Drive targeting NCP vehicles. The directive emphasizes the need for tight border controls to prevent smuggling at the point of entry into Pakistan. Additionally, the FTO called for the timely auction of seized vehicles in accordance with the law.
The investigation revealed that despite the 25th amendment to the Constitution in May 2018, which merged FATA/PATA with Khyber Pakhtunkhwa, and the subsequent approval of tax concessions for residents of these areas until June 30, 2023, smuggling of NCP vehicles has persisted.
The ECC decision, issued on May 31, 2018, allowed the use of NCP vehicles in erstwhile FATA/PATA for five years, subject to certain conditions. However, the FTO found that smuggling of NCP vehicles is ongoing even after the prescribed cutoff date. The FBR formations responsible for enforcing customs regulations have been directed to seize all smuggled vehicles being transported through settled areas without payment of duties and taxes.
The FTO expressed concern over the inadequate efforts by Customs Enforcement and Intelligence formations in intercepting and seizing smuggled vehicles. Despite having information about an increase in the number of NCP vehicles, only 204 were seized collectively by Customs Enforcement in D.I. Khan and Peshawar, and 57 were apprehended by Directorate General I&I Peshawar from July 2021 to June 30, 2022.
The FTO noted that the operational challenges raised by Customs Enforcement, including the lack of staff and non-cooperation from other LEAs, do not justify the failure to address the issue effectively. The directive aims to eliminate the smuggling of NCP vehicles and ensure compliance with the law, contributing to improved revenue collection and curbing illicit activities in the country.