Wary Pak not acting against tax evading Chinese firm

Islamabad: Pakistan customs officials are reportedly reluctant to file a criminal case against a Chinese company for evading taxes due to what they described as “national interests”.

According to the Express Tribune, sensitivities related to the over USD 60 billion China-Pakistan Economic Corridor (CPEC) project, is preventing customs from filing a case against China’s Huaneng Fuyun Shipping Company, which supplies coal to a 1,320-megawatt power plant in Sahiwal in Punjab province.

It has been revealed now after almost a month, that the Huaneng Fuyun Shipping Company evaded paying Rs. 1.12 billion in taxes on its imports initially, but when the Pakistan tax machinery brought it to its notice; it paid up the amount in April.

The Federal Board of Revenue (FBR), however, is reportedly reluctant to register a criminal case against the Huaneng Fuyun Shipping Company, thus highlighting the challenge and complexities faced by authorities in Pakistan when it comes to dealing with Chinese firms operating on its soil since 2013.

According to the Express Tribune, no first investigation report has been registered against the Chinese firm till now.

The tax evasion case was unearthed by the Model Customs Collectorate at Port Qasim, according to FBR documents.

The company belongs to state-owned China Huaneng Group. Another sister company of the Group.

It is a key state-owned company established with the approval of the State Council in China. It does business in development, investment, construction, operation and management of power sources; finance and energy transportation. Customs authorities acted after they came to know that the company utilised machinery imported during fiscal years 2016-2017 without filing of Goods Declarations (GDs) and payment of duty and taxes.

Scrutiny revealed that the company imported 14 consignments since 2016. Out of these 14 consignments, four got cleared against payment of duty and taxes, but 10 were utilised without fulfilling due process of law and payment of duty and taxes, according to the FBR documents.

Although the FBR is reluctant to register a case against the firm, it has started other legal formalities for recovery of penalties on the evaded amount of duties. The collector has further directed to identify and nab culprits involved in the scam. (ANI)