Cases “ex officio”: the FTO completes its investigations – Business & Finance

ISLAMABAD: Federal Tax Ombudsman (FTO) has investigated several ex officio cases including misuse of unaccompanied baggage facility, customs clearance of imported goods, ongoing investigations against 180 FBR officials , a tendering process for unpaid vehicles, and corrupt practices by the customs authorities in Balochistan.

Sharing details of some major cases, said a senior OTF office official company registrar here on Saturday that multiple administrative issues were studied and recommendations were made to the FBR for improving the governance of tax processes.

An ex officio investigation has been initiated by the FTO pursuant to the exercise of jurisdiction conferred under section 9(1) of the Federal Tax Ombudsman Order 2000 (FTO Order). The Unaccompanied Baggage facility in Karachi was misused by the clearance of goods in commercial quantity and items which were not bona fide baggage within the meaning of the Baggage Rules 2006.

The investigation revealed that the existing baggage clearance system in the WeBOC computerized system was not implemented in the majority of baggage shipments, which in turn provides an open possibility of abuse for baggage clearance. not authentic in violation of legal provisions.

Being a blatant case of maladministration, the FTO ordered the FBR to ensure the processing of all baggage shipments through an automated module in WeBOC without any exceptions and ensure its implementation at the Collectorate of Customs Enforcement, Karachi. This will not only eliminate any risk of misuse of the facility in question, but will also result in the prompt processing of bona fide baggage from inbound passengers at various airports across the country.

The FTO also addressed the issue of ongoing investigations against 180 FBR officials.

The FTO has taken up the issue that since 2015, about 180 FBR officials are being investigated for corruption and inefficiency, but investigators were delaying the completion of departmental investigations in collusion with offending officials. During the investigation, the Revenue Division Secretary, in his comments, indicated that investigations had been initiated against FBR employees under the Civil Servants (E&D) Rules 1973 and the Civil Servants (E&D) Rules 2020 efficiency and discipline of civil servants (E&D). However, in all ongoing investigations under E&D Rules, 2020, the stipulated sixty-day period had already elapsed; no serious effort had been made by investigators to bring the accused FBR officials to justice.

In this independent investigation, the FTO concluded that the delay, inefficiency and incompetence in concluding the investigation proceedings initiated under the E&D Rules 1973 and the E&D Rules 2020 not only harmed internal accountability of FBR, but also amount to maladministration within the meaning of Article 2(3). ) (ii) of the FTO Order.

Therefore, the OTF directed the FBR to seek explanations from all investigators and committees and take appropriate action against them for causing undue delay in the conclusion of investigative proceedings. The FBR was also advised to develop a centralized control mechanism at headquarters level to ensure that disciplinary procedures are completed.

In another ex officio investigation, it was found that several Customs Collectorates and the Customs Intelligence Directorate had not correctly identified, at the time of the auction of unpaid vehicles, the persons who had participated in the auction customs and had not registered their details which was not only against the rules, but handing over vehicles to these strangers could pose a high risk to the security of the country. Investigations were therefore opened. During the initial investigation, Customs authorities in Quetta confirmed that no CNICs or other details were recorded in the bidders’ records. The FTO was informed that the CNICs were missing in nine cases while in 23 cases the CNIC numbers were corrected.

It was also reported that 36 non-filers filed income tax due and lodged challans with auction customs authorities. Similarly, the Director of Intelligence and Customs Investigations, Gwadar, also reported to the FTO that despite obtaining the relevant references from the successful bidders, the CNIC numbers of 38 bidders were not registered. FTO has issued instructions to ensure that complete personal data is captured in auction documents

It has also been observed that non-filers also participate in auctions and make high bids; however, there is no institutional mechanism to monitor these transactions. Therefore, the Federal Revenue Council was instructed to develop a mechanism whereby the Customs Department could electronically transmit the information of all successful bidders to the Inland Revenue Department to initiate the necessary procedures. The Federal Tax Ombudsman also recommended in the order that if the bidders are not filers, the Inland Revenue Department (IR) should take the necessary legal steps to bring them under the tax net, by issuing instructions , rules, etc.

Following numerous complaints of incompetence, inefficiency and corrupt and improper exercise of powers by the Customs authorities in Balochistan, an ex officio investigation has been initiated in the exercise of jurisdiction conferred under section 9(1) of the Federal Tax Ombudsman Order 2000 by the FTO.

According to the report of the FTO inspection team, instructions have been given to the FBR for the improvement of the functions of the collector(s), in order to prevent the risk of embezzlement and corruption, the official added.

The FTO had decided on its own initiative that due to abnormal delay in clearance of consignments at the three clearance collectors in Karachi, importers had to pay late fees amounting to 0.500 to 0.700 million rupees on each container. This delay not only increased the cost of doing business and the cost of landing for importers, but also resulted in a shortage of industrial raw materials. Terminal operators were urged to ensure the adoption of electronic/online procedures and to improve their capabilities. The FBR has also been tasked with coordinating with Karachi Port Trust the provision of space to major terminal operators. After a thorough investigation and in light of its findings, it was recommended that the FBR direct the relevant authorities to strengthen the risk management system that will ensure more customs clearance through the green and yellow channels and to develop a pre-arrival processing system including freight advance. information, prior filing of goods declaration, electronic payment system. The authorities have been instructed to conduct a periodic release time study to measure the actual performance of port activities and customs procedures that will facilitate trade at the port and improve dwell time for importers. It was also recommended that FBR also request the Ministry of Ports and Shipping to delegate an independent audit agency to assess and improve the authorizations and performance of terminal operators in ports and submit a quarterly implementation report .

In another instance, the OTF observed that the preparation and use of false/fabricated documents and false entries in the EV system of provincial excise and taxation was a serious criminal offence.

The official added that the customs authorities must take appropriate action in accordance with the provisions of the Customs Act 1969 to arrest the culprits and initiate appropriate criminal proceedings, including enforcement measures for the seizure of vehicles. In addition, it was necessary to make the necessary systemic changes for a smooth and automated electronic transfer of relevant information to provincial authorities in order to prevent such incidents in the future.

Copyright Business Recorder, 2022