The Federal Board of Revenue (FBR) is all set to launch a mechanism for the online verification of letters of credit (LCs) with the banks to curb money-laundering and under-invoicing, official sources said on Friday.
A senior official of Pakistan Customs said imports worth billions of dollars are made against payment sent aboard through Hawala and Hundi.
Therefore, "a mechanism is being developed with the State Bank of Pakistan (SBP) to verify the LCs opened against the import proceeds," said the official. FBR and SBP recently launched the online submission of Form-E, which can be verified with the bank that issued the letter for exports.
In the past, fake forms deprived the country of foreign exchange as exports were sent abroad without inflows.
"Through online LCs verification, the customs authorities would be able to identify the origin of the country, the value of imported item and total amount remitted to the foreign seller," the official said. "It will help in curtailing the menace of under-invoicing and smuggling through official channels."
A FBR report said importers under-invoiced $2.43 billion worth of imported goods alone in 2013 by misusing the facility under the free trade agreement between Pakistan and China. Another amount of $829 million has been over invoiced in the same year at the declaration stage.
The latest figures of under-invoicing reached to around six billion dollars, said a tax official.
The FBR sources said the online verification of LCs would also serve the purpose of broadening the tax base and documentation of economy.
They said a large number of importers have obtained the national tax numbers (NTN) but they are non-filers.
The directorate of broadening of tax base recently asked the customs authorities to provide the directorate with the details of all active importers.
(Source: The News International, 21 November)