FTO Directs FBR for Swift Action Against Fraudulent GDs

FTO Directs FBR for Swift Action Against Fraudulent GDs

Karachi, May 4, 2024 – The Federal Tax Ombudsman (FTO) has mandated an immediate investigation by the Federal Board of Revenue (FBR) into the rampant misuse of Goods Declarations (GD) concerning export consignments processed through Pakistan’s integrated customs platforms, the Pakistan Single Window (PSW) and Web Based One Customs (WeBOC).

This decision follows a complaint lodged against the FBR, PRAL (Pakistan Revenue Automation Ltd.), the Directorate General of Intelligence and Investigation (I&I), and two Karachi-based freight companies, M/s. Expost Express Freight Logistics and M/s. Pearl International. The complaint highlighted serious allegations of fraudulent activities where fake export GDs were filed, exploiting the complainant’s unique identifiers such as CNIC (Computerized National Identity Card) and NTN (National Tax Number).

As per the directives issued by the FTO, the Chief Customs must alert all relevant field formations to prioritize identifying and correcting instances where these identifiers are misused internationally. The misuse of such sensitive information not only jeopardizes the financial integrity of individuals but also threatens the security protocols governing international trade through Pakistan’s customs systems.

Further compounding the urgency, the FTO has ordered the Collector of Customs at Jinnah International Airport (JIAP) in Karachi to place M/s. Expost Express Freight Logistics and M/s. Pearl International on a black list. These entities are to be stripped of their unique user identifiers after a due process involving show cause notices and hearings, scheduled to be concluded within 15 days.

This action comes in response to the complainant’s repeated unsuccessful attempts to seek redress directly through the FBR, PRAL, and I&I Customs, despite notifying them of the fraudulent filings against his name. The complainant’s distress is particularly acute as he claims no exports from Pakistan yet finds himself ensnared in tax anomalies due to falsified GDs.

The complainant’s ordeal has led to significant disruptions, preventing him from submitting his monthly sales tax returns unless he falsely acknowledges these fraudulent GDs as his own. This manipulation has placed him in a precarious legal and financial position, compelling the FTO to take a firm stand.

The FTO’s investigation revealed a clear violation of the Customs Act, 1969, identifying a deliberate misuse of the complainant’s NTN, orchestrated by M/s. Expost Express Freight Logistics in collusion with M/s. Pearl International. The tax ombudsman has highlighted this as a systemic issue needing urgent rectification to safeguard taxpayer rights and ensure compliance with national tax regulations.

The FTO’s sweeping directives also instruct the concerned Inland Revenue Service (IRS) Commissioner and the JIAP Customs Collector to immediately resolve the complainant’s issues. This includes allowing him to rectify his NTN details and, subsequently, to file his sales tax returns unaffected by the previously misused credentials.

This decisive intervention by the FTO underscores its commitment to enforcing tax justice and its crucial role in maintaining the integrity of Pakistan’s taxation and customs systems, aiming to restore faith among taxpayers shaken by vulnerabilities in system safeguards.