It seems no legal loophole goes unexploited. There is a report in an English daily about the misuse of the facility of duty-free import of luxury vehicles by some foreign diplomats, international non-government organisations, and armed forces personnel of a few countries. Under the rules, foreign dignitaries – both diplomats and representatives of international NGOs and armed forces personnel of various countries – can import luxury vehicles for personal or official use by paying a minimal import duty, and after a certain time, these vehicles are sold to Pakistanis. The scheme, which has cheated billions in duty, has attracted the attention of the Federal Board of Revenue (FBR), which has reached out to the Ministry of Foreign Affairs, asking it to take up the issue with foreign embassies and international NGOs. If dug deep, the FBR and other departments would discover several groups of smugglers benefiting from diplomatic entitlement. FBR Chairman Shabbar Zaidi, who has literally taken up a fight with tax cheaters, has written to the foreign ministry about this practice. The FBR and other departments can ascertain the number of vehicles imported in the last 10 years. Similarly, the number of unauthorised people using the duty-free vehicles can be taken to the task.
The facility has deprived the national exchequer of billions over the years. According to the report, a Lexus SUV comes for Rs10 million and the diplomatic cover saves foreign dignitaries an import duty of Rs30 million. Once the vehicle lands in Pakistan, the importer passes it on to a local man after fetching a monetary benefit. It is reported the local buyers save Rs15 to 20 million. The unchecked arrival of luxury vehicles gained momentum after September 11, 2001, when foreign dignitaries were allowed to use covered registration number plates (starting with the alphabets QL, QM, and QN) due to security reasons. Also, in several instances, diplomats were caught issuing fake appointment letters on behalf of embassies. The matter involves sensitive quarters, so it is hoped that the government will take up the issue with caution. tax
(This news/article originally appeared in Daily Times on December 31st, 2019)