Pakistan and China will start exchanging trade data digitally from April 30 in a bid to check under-invoicing of imports. Pakistan Tax officials said an electronic data exchange platform, with its beta testing being scheduled this month will become officially operational by the end of next month.
Previously, we reported the policy of ETD between Pakistan and China:
Be Careful! Or Pakistani Importers Will Subject To Penalties!
Curbing under-invoicing
of imports from China
The import value declared before Pakistan Customs was short by $2.437 billion than what has been recorded by China Customs as exports value to Pakistan on 37 tariff lines.
On another 13 tariff lines, the import value declared before the customs is in excess of $829 million than what has been recorded by China customs as exports value of Pakistan.
Pakistani official illustrated that the trade data exchange will help in curbing under-invoicing of imports from China, which is hurting Pakistan’s industry.
Official news link
https://www.thenews.com.pk/print/287689-pakistan-china-to-exchange-data-from-april-30-to-check-trade-mispricing
How ETD effects
export & import
There is a huge trade deficit for Pakistan in trade deals with China that causes severe revenue losses because of under-invoicing behavior. So standardisation and transparency in data collection are necessary in case of tax evasion.
Declared Prices of many commodities imported to Pakistan used to be lower than the actual prices remarked on the invoice. In such way, importers had access to escape from a certain amount of taxes.
Trade data collection will become completely transparent. The lower prices declared by importers to Pakistani Customs, the lower prices supposed to be declared by exporters to Chinese Customs. That means, there will be less tax refund for Chinese exporters.
Therefore, both importing and exporting declared prices must be the same for the sake of Customs clearance. Or, Pakistani local importers will subject to penalty!
Chinese rules of punishment
on false declaration
False declaration on exported goods especially those products which can get tax refund, is prohibited in China.
If there are under-invoicing behaviors, in accordance with Administrative Punishment Law:
If it is the first violation, a warning will be given to the enterprise;
If it is the second violation within 2 years after the first case, besides from another warning, the enterprise will subject to a penalty of 30,000 RMB at most;
If it is a case of gross violation, the enterprise will have no access to foreign trade business for 1 to 3 years;
For violator who acts as the legal representative, he or she will be dismissed from the position of foreign company.
Temporary Punishment Measures on Behaviors of Writing Export Invoice at a Lower Price (in Chinese) (only for reference)
Tap to slide
We are here to remind our Pakistani customers that no more under-invoicing from now on!
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