Traders, govt staff colluded to evade Rs 350m a day in customs

Published On: March 3, 2018 02:30 AM NPT By: Rudra Pangeni  | @rudrapang

KATHMANDU, March 3: Traders in cahoots with government employees were evading customs duty worth around Rs 350 million each day, according to comparative figures between Friday and the recent past. 

Revenue collection at all customs points was close to Rs 1.25 billion on Friday. The daily collection used to hover between Rs 800 million to Rs 900 million per, according to records at the Department of Customs.

Revenue Secretary Shishir Kumar Dhungana informed that revenue collection at the customs points has increased significantly following directions issued in this connection by the new finance minister. 

“This result has been achieved after newly-appointed Finance Minister Yub Raj Khatiwada directed officials to take stringent measures against any move at evading taxes,” said Dhungana. 

All the customs chiefs were invited to the new finance minister's office on Friday, four days after he assumed office. Khatiwada discussed the matter of customs collection and issued a strong directive to the officials to control any move at under-invoicing and smuggling and to carry out strict surveillance.

“His directions were to formalize trade through real customs declarations, with any untoward activities causing loss of revenue to be acted upon immediately. They were also asked to enforce a chain of command and exercise discipline,” reads a press release issued by the Ministry of Finance after the minister's directives. 

Under-invoicing and use of fake bills at customs have resulted in slow growth in revenue collection at the customs points and this is where the finance minister wants to act first, government officials said. 

Import duty collection is 98.88 percent of the targeted Rs 65.04 billion as of mid-January (first seven months of the fiscal year). Import has been soaring, fueled by consumption. The government has targeted to collect Rs 120 billion customs tax this fiscal year. 

Khatiwada has directed effective monitoring against smuggling and customs officials are not to tolerate any activities making for loss of revenue. “Customs offices should also have special surveillance of any inedible goods and goods causing an adverse impact on the environment,” reads a press release quoting Khatiwada's direction to customs officials. 

Picking  Khatiwada as finance minister has been hailed by many, given his knowledge of the economic sector and experience as governor of Nepal Rastra Bank.

Khatiwada also said that customs officials should not satisfy themselves with just achieving set revenue targets but should try to achieve much more . 

Regulating the customs may help  the government meet the budget deficit of Rs 78 billion at a time when it is under pressure to fund  the spending needs of the new federal structure. Under-invoicing at  customs points has not only discouraged fair trade practitioners but has also had a chain effect on tax evasion,  including income tax by traders and suppliers. 

Plans have been made to connect the declared customs prices of goods  to their market prices via integrated software for the purpose of  income tax assessment. 

This integrated recording of transactions is expected to control fraudulent trade practices, including uuse of fake bills and under invoicing. 

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