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Mr. Syed Muhammad Shabbar Zaidi, the Chairman Federal Board of Revenue, along with his team updated a gathering of representatives from media and development partners in a local hotel in Islamabad on the progress being made on trade facilitation particularly on one of government’s key reform program - the implementation of trade related National Single Window.
Pakistan Custom is the lead agency for NSW implementation under the supervision of a high level Steering Committee currently chaired by the Adviser on Finance, Revenue and Economic Affairs. The NSW is a quantum jump from the current silo and paper based management of Pakistan’s external trade involving 44 different government departments responsible to regulate different aspects of imports, exports and transit trade. The current system being inefficient and opaque creates complications for traders and economic operators leading to increased costs and delays as well as lax government’s controls in carrying out cross border trade. As per World Bank’s report on ease of doing business the business community in Pakistan incurred more than 400 million USD extra cost as compared to the average cost for imports and exports in South Asia region, during the last one year. As a result competitiveness of Pakistan to facilitate trade, attract investment, get integrated into global value chains and be a regional hub for trade and transit is seriously undermined.
The good news is that as the leading agency for NSW implementation, Pakistan Customs has not only made substantial progress on NSW implementation but is also successfully improving cross border trade facilitation. Talking to the gathering Dr. Jawwad Uwais Agha, Member Customs Operations informed that Pakistan’s global ranking under cross border trade related indicator of World Bank’s ease of doing business Survey for 2019 has improved by 29 positions due to efforts of Pakistan Customs. He informed that the indigenously developed Customs Single Window has already been implemented in the shape of WeBOC, which handles 90% of Pakistan’s external trade providing 24/7 paperless processing services. The upgraded version as WeBOC-Glo is presently being rolled out. He informed that Customs collects 48% of FBR’s total revenue; however, its role is undergoing a paradigm shift from a mere revenue collection and enforcement agency towards the lead facilitator of cross border trade. Being responsible for implementation of numerous measures under WTO’s Trade Facilitation Agreement, Pakistan Customs is leading the public sector in automation. Under its INTRA initiative, Customs successfully partnered with 14 government departments and ministries in linking them with WeBOC-Glo improving controls and efficiency. The introduction of electronic I, E forms, E-payment in collaboration with SBP for trade as well as the Currency Declaration System and Advance Passenger Information System for airports by Customs has improved compliance with FATF related requirements. He emphasized that NSW is a very complex undertaking and would require continued political support as well as cooperation from concerned government departments and development partners to succeed.
The Project Director made detailed presentation informing that with technical assistance from development partners specifically USAID, IFC and ADB Customs has achieved important milestones in the NSW project in a short period of one and a half year. The business model for execution and operations as well as alignment of participating departments has been approved by the Steering Committee in April, 2019. The draft legislation for NSW has been prepared while the functional, revenue and technical models are expected to be finalized by June, 2019. Though government has allocated funds in the upcoming PSDP, however, Customs is currently providing funds from its GD service fee to fast track the NSW implementation. If current pace continues the new system is expected to become operational much earlier than the deadline of 2022. The program is also expected to be completed below its initial cost estimation of USD 163 million by relying on indigenous resources. Once fully implemented, the NSW will eliminate need for physical engagement between the traders and regulators besides simplifying the procedures and improving predictability. It will facilitate electronic submission, risk based parallel processing and issuance of regulatory approvals relying on data/process harmonization while using modern technology. The port community system will help transform the logistics side of external trade. In addition to B2G interactions, the NSW will strengthen and reinforce B2B, and G2G relationship.
The Chairman FBR stated that NSW and other automation related initiatives by Customs are the manifestation of the government’s commitment to reform and modernize. He also emphasized that with continued support from the government and the development partners particularly the USAID, ADB, the World Bank Group, and UK’s Department for International Development, the FBR is confident of meeting its reform objectives.