By misusing the entrustment scheme, the importers-cum-exporters have failed to export back Rs. 5 billion worth of gold.
This was revealed during a study of the Gold and Jewelry sector conducted by the Intelligence and Investigation Inland Revenue of the Federal Board of Revenue (FBR).
The government’s Entrustment Scheme provides a facility for the export of jewelry against imported gold supplied as partial advance payment.
The exporter is required to export eligible and authorized items within 120 days from the date of import under the scheme.
Sources told Propakistani that the importers-cum-exporters have blatantly misused the Entrustment Scheme, and the concerned department had turned a blind eye to this matter while commercial banks have also not informed the Trade Development Authority of Pakistan (TDAP) and the State Bank of Pakistan (SBP) about the sale proceeds.
It was revealed that gold worth approximately Rs. 5 billion was not exported back, and a mismatch was detected between the export proceeds provided by the TDAP and the income tax declaration of the taxpayers.
Sources said that only 21,396 of 60,000 jewelers have National Tax Numbers (NTN), while on average, 9,000 NTN holders are filers, which is almost 15 percent, and only 0.82 percent have paid taxes above Rs. 100,000. Sources added that the study revealed that only 1,080 jewelers are registered in Sales Tax, of which 157 are filers.
It is pertinent to note that the Federal Tax Ombudsman has also taken notice of the misuse of this scheme and has directed the Federal Board Of Revenue (FBR) and the Federal Investigation Agency (FIA) to initiate action.
ProPakistani approached the Chairman of the FBR, Dr. Ashfaq, for his comments on this matter, but no reply was received till the filing of the story.