To crack down on behavior of tax evasion by false declaration on exported goods from China, Pakistan and China have started exchanging trade data digitally since April 30. And now has come into effect!
Previously related reports: 
Be Careful! Or Pakistani Importers will Subject to Penalties!
Attention! No More Under Invoicing of Imports to Pakistan!
Here is a case:
A Pakistani importer intended to declare to Pakistan Customs with lower cargo value on FTA, featuring 2,500USD, which were only 1/10 of the actual cargo value, so that he would subject to less tax. However, the export company had already declared to Chinese Customs with the amount of 25,000USD.
So, in this case, can the export company make an FTA featuring only 2,500USD for the Pakistani customer?
The answer is
No way!
Evade tax by making an FTA with lower cargo value?
Don’t even think about that!
Specifically, you need to be more careful about payment risks. So far, L/C is more applicable on export to Pakistan. Compared to T/T, L/C is much safer.
And there are 3 tips about payment:
Choose a trustworthy bank which is recommended both in China and Pakistan, such as HSBC, Standard Chartered and Citibank.
Meanwhile, Pakistan local banks including Habib Metropolitan Bank Limited, National Bank of Pakistan, Askari Commercial Bank also earn good reputation.
You can ask the issuing bank to provide a credit report to the negotiation bank. And there will be a risk assessment on buyers by the negotiation bank based on the credit report.
Additionally, if it is a large amount of transaction, you’d better buy an insurance from China Export & Credit Insurance Corporation.
Before issuing L/C, you can ask your customer for the L/C draft for verification in case of extra cost caused by further amendment. And you can entrust bank or other qualified agent to finish verification in a professional way.
Here is the announcement issued by Chinese Customs, featuring that Electronic Data Exchange (EDE) would be officially launched from April 30:
Pakistan government is now getting tough with tax evasion on export. Therefore, you should refuse under-invoicing intention especially when the customer requires the Certificate of Origin China-Pakistan FTA.
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