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Rampant tax evasion in ports

REZAUL KARIM | November 09, 2019 00:00:00

The anti-graft watchdog has advocated cent per cent physical verification of containerised goods amid rampant tax evasion in top seaports, officials said.

But multiple consignees said such one-to-one inspection would impact goods movement to and from Bangladesh as doing the job manually will take much time.

If it takes time, they said, the lead time of transportation will propel up significantly amid poor infrastructure in the ports.

Anti-Corruption Commission (ACC) has suggested that cabinet division take immediate action to this effect as it is taking its toll on the financial health of the national economy.

"ACC has come up with recommendations like conducting cent per cent psychical verification of export-import containers before placing those for scanning devices."

A senior ACC official told the FE that the watchdog has written to cabinet division as the supreme division of the government.

"Cabinet division will put forward the letter to the authorities which it believes is the best to implement the suggestions."

It has also sent copies to the National Board of Revenue and both commerce and shipping ministries.

ACC argues that it has found some genuine evidence of growing tax evasion incidents through misdeclaration and other means, mostly at the premier Chittagong port.

The seaport handles around 3.0 million 20-foot equivalent units that cover more than 92 per cent of the country's nearly $100 external trade.

ACC said such evasion has put a question mark on the role of customs authorities as this happens continuously.

As per the rules of business, the customs authorities are the sole agency to impose and realise taxes and protect the interests of the state in terms of revenue mobilisation.

The ACC letter, a copy of which is obtained by the FE, said the cabinet division should inform the anti-graft body after taking necessary action.

It said regular inspections would go on as long as all necessary scanners are installed in all the ports, mainly at Chittagong port.

If there is a need for additional manpower deployment, ACC said, the expenses must be realised from the consignees.

When contacted, a number of exporters and importers said cent per cent inspection will increase the lead time of transportation. "We cannot fall prey to some wrongdoers."

A Chittagong-based commodity importer told the FE that he cannot understand why the consignees will pay for additional manpower employment.

Importers will realise the amount from end-consumers that will hit the price level upwards, he added.

When approached, ACC secretary Md Dilwar Bakth said under existing facilities, cent per cent inspection of containers is hardly possible.

But they have already instructed the Chittagong Customs House and other customs houses to follow ACC's recommendations.

"We've also found some evidence of duty evasion in the ports through our own investigations," Mr Bakth cited.

Currently, four state-of-the-art scanners are now in operation at Chittagong port.

In contrast, Benapole port has two scanners and Mongla port and Kamalapur inland container depot has one each.

When asked, Chittagong Customs House assistant commission Mahbubur Rahman said two more scanners might be installed in the port this month.

NBR is set to procure some 14 new scanners at an estimated Tk 5.0 billion.

Customs have already got approval from finance minister AHM Mustafa Kamal to buy the devices with public funds.

On many occasions, the minister highlighted the importance of scanning all export-import products in ports electronically.

Asked for comment, Exporters Association of Bangladesh president Abdus Salam Murshedy said inspection of goods depends on the nature of traders.

Importers and exporters having an excellent business background should not be brought under such harsh conditions, he remarked.

Mr Murshedy said shippers would fail to send goods in time if cent per cent physical verification of containers is introduced.

It would also hamper the country's export and import growth, the business leader observed.

He suggested that the authorities concerned take legal action against those involved in wrongdoings, but no wholesale action against all.Bangladesh has three seaports-Chittagong, Mongla and Payra ports.

There are also 32 river ports, according to the Bangladesh Inland Water Transport Authority.

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