Tax violators, smugglers to face penalties

ISLAMABAD: The government has introduced punishments and fines for those who break tax laws or smuggle goods into the country.

The Federal Board of Revenue (FBR) will notify different cash penalties for various offences soon after the approval of the budget 2023-24 in the parliament.

As per the Finance Bill 2023, anyone who fails to provide or upload required documents under sections 79 or 131 of the Customs Act 1969 will face a penalty of up to Rs50,000.

The government is proposing to make the punishment for smuggling essential goods and banned items more severe. This means that those caught smuggling these items will face harsher consequences.

The bill proposed to change the definition of smuggling to allow Customs to conduct anti-smuggling operations within the country. Additionally, the provincial Levies and Khasadar Force are being added to the list of agencies that can assist Customs in anti-smuggling operations in Khyber Pakhtunkhwa and Balochistan.

The government has abolished the penalty for not having documents inside a shipment. Additionally, the penalty for not uploading documents electronically with the goods declaration is being relaxed to make trade easier.

The bill proposed to reduce the time required to file a goods declaration (GD) after shipments arrive at border customs stations to reduce congestion. Additionally, the warehousing period for perishable items is being increased from one month to three months to help traders.

For speedy clearance and reduced human interaction, traders will have the option to use the Customs Computerised System for adjudication. For facilitating groups of travellers who can’t file their baggage declarations, the government is allowing a representative of the group to file a declaration for all members.

The Finance Bill has changed section 33(23) of the Sales Tax Act to expand the offences related to selling goods with fake or missing tax stamps, banderoles, stickers, labels, or barcodes.

A new Section 99D is being proposed in the ITO to tax “unexpected income, profits or gains” that are either disclosed or undisclosed. This tax will apply if there is an economic factor that results in unexpected income. Economic factors include international price fluctuations and foreign currency fluctuations.

This tax could affect exporters, commercial banks, foreign exchange currency dealers, and others. The proposed tax rate is up to 50pc of the income, gain or profit. The FBR has broad discretionary power to tax under this section. The details of the tax will be specified through a notification in the official Gazette.

Published in Dawn, June 11th, 2023

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