Govt to adopt customs self-declaration

KATHMANDU, June 2: In a major policy shift, the government is preparing to recognize self-declaration at customs and tighten customs revenue leakage through post clearance audit (PCA) of goods in the market instead of at customs points.



The change is being adopted following implementation of the ´green channel´ -- through which self-declared items are cleared by customs without any hassles -- for three major customs points to facilitate travelers and importers and enhance efficiency in customs operations. [break]



The government had implemented green channels at Tribhuvan International Airport (TIA), Birgunj Customs and customs at the dry port in Birgunj as pilot projects under a ´selectivity customs model´ in the current fiscal year.



Under the new system, the government had allowed some 15 percent of total import items to enter the country on the basis of self-declaration by importers. However, only items identified as ´revenue insensitive´ were listed for this facility.



“We will substantially expand this list from the next fiscal year and also introduce green channels at other major customs as well as,” Navaraj Bhandari, director general of Department of Customs (DoC), told myrepublica.com.



Though he refused to divulge further detials, sources said telecoms, diplomatic missions, government procurements, public enterprises, public limited companies and private importers having a good track record at customs will enjoy the facility.



“Among the private importers, firms declaring maximum retail prices (MRPs) of goods will enjoy the facility with high priority,” said the source.



The government believes that enforcement of a self-declaration system at customs will greatly simplify customs operations. It will also ensure one-stop services to traders, reduce anomalies as traders need not contact the officials, and make customs work more convenient.



“Most importantly, the new system will facilitate things for large and honest taxpayers,” said the source.



However, the government will take a few years to fully adopt the new system as it needs to develop a comprehensive ´risk engine´, software and digitized parameters that guarantee checks and controls in the system. Also, it will need to develop a profile history of industries and firms to determine genuine players.



DoC plans to extend ´green channel´ facilities to good firms as soon as they are identified, while firms that are yet to gain such a tag will need to operate through the red channel.



In the red channel, revenue officials will go through the goods and cross-check all details irrespective of what the importers declare. Items considered as revenue sensitive will also be cleared through the red channel.



As a crucial control measure, the government is also incorporating a stringent penalty provision for green channel beneficiaries. Sources said a heavy penalty will be provisioned for firms that abuse such facilities.



DoC is also setting up a separate office under PCA to check abuses and revenue leakages. The office will mainly conduct market inspections and take stock of retail prices of goods throughout the year and ascertain whether or not self-declaration was done genuinely.



“As PCA is a critical monitoring and enforcement wing, we are strengthening and empowering it accordingly,” said the source.



The government is planning to tie up PCA with selective auditing of the Inland Revenue Department, so as to link up its findings and plug other inland-revenue leakages as well.



milan@myrepublica.com

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