ISLAMABAD: The Customs Intell­igence Department has unearthed a network of top officials involved in large-scale misdeclarations of description and value of imported goods in over 900 containers causing losses worth billions to the national exchequer.

The misdeclarations at several collectorates were detected a few months ago especially at the Karachi-based collectorates, Torkham Customs Stations and Collectorate of Appraisement in Quetta, but the issue was placed on cold burner for months.

Official documents seen by Dawn and background interviews with senior tax officials showed that those posted as ‘collectors or chief collectors’ are linked to political circles or top bureaucracy at the federal level and are using this clout to their advantage and causing huge revenue losses to the national exchequer.

The corruption in customs department has become so vivid at the collectorate level that DG Customs Intelligence Muhammad Zahid hadsent several letters to FBR Chairman Shabbar Zaidi for taking action against the involved officials.

A special report on fraud at Customs Station, Torkham was also sent to the chairman on Dec 6, 2019.

Similarly, several reports regarding corruption at Appraisement Collectorate Quetta, Port Qasim Collectorate and Appraisement East were also sent to the chairman.

However, no action was taken against those officers involved in the corruption.

One of the much-awaited actions was taken on Friday when few customs officers posted in Peshawar and Quetta were transferred and relieved from their job with immediate effect.

“Few names of senior customs officers posted in Karachi were dropped at the highest level before issuing the notification”, a source in the FBR told Dawn.

To investigate the level of revenue loss and corruption, the government has given responsibility of the inquiry to the Federal Investigation Agency (FIA). “We have requested the FIA to investigate the case of Torkham and Quetta”, the source added.

But, Chief Collector North Dr Asif Mehmood Jah told Dawn that he has also initiated an inquiry into the scam. However, he said that he was not aware of the scam even though some of the instances of misdeclarations were also reported at Islamabad dry port, Islamabad airport and Sust Dry Port, which fall under his jurisdiction. “I will complete my inquiry in two weeks”, he claimed.

As per reports sent by DG intelligence to FBR chairman, 355 containers of imported goods were cleared without duty and taxes at Customs Station, Torkham. All these containers were released on fake goods’ declarations.

The FIA will also investigate the role and responsibility of directorate officials, who have failed to detect the scam.

According to a senior customs intelligence official, the Customs Station, Torkham case is very unique in the way that trucks carrying imported goods passed through the station without filing mandatory declaration and paying duty and taxes.

The network is so powerful that even Prime Minister Imran Khan openly commented on it.

In a public speech given at Pind Dadan Khan on Dec 26, 2019, PM Imran Khan had referred to corruption in the customs department. “We found one collector customs in one area who was earning Rs70 crore per month,” he said during that speech.

A Quetta-based customs official confirmed to Dawn regarding an incident of misdeclaration, clearance of refined steel as scrap and diesel especially at Taftan Border Station.

“We have conveyed to the FBR officially and unofficially about these corruption [instances]”, said the official while adding that no one will believe the FBR was not aware of the widespread corruption at the Quetta Collectorate.

On May 21, 2019 a Customs General Order (CGO) no.5 was issued which clearly mentioned role and responsibilities of chief collectors. One of the responsibilities of chief collector is to inspect collectorates and sub-ordinate offices. However, chief collector was stopped from involvement in the day-to-day operational matters of collectorates.

One senior customs officer believed the CGO was issued to stop collectors from monitoring collectors especially those associated with the network and powers were shifted to member customs operation.

According to sources at the intelligence office, more than 500 containers were detected in which misdeclaration was also detected involving billions of rupees in tax evasion in Karachi.

“We have sent a report of more than 100 containers of steel trade misdeclarations to the FBR which were confiscated”, the source said, it involved tax in the range of Rs1-1.5bn.

The refined steel was cleared at ports for export processing zones duty-free which were actually diverted for other purposes.

However, it is estimated that the number of containers cleared from Karachi port on the pretext of export processing zones was well above 500. Some officials believe the total number of containers could be more than 1,500 but it could not be confirmed officially.

Under the garb of Landa (used garments), electronic goods were cleared at Karachi ports. “We have sent all these reports to the FBR”, the source said adding the tax authority has yet to take any action against people involved in the corruption.

According to sources, DG office sent several letters about the misdeclarations at Port Qasim, Appraisement East and many other offices.

Now, it is the responsibility of high ups to take action against these officers who are still enjoying their positions.

Published in Dawn, February 2nd, 2020