“Govt is serious to streamline the customs administration”

By Shishir Kumar Dhungana

The government is working seriously to streamline the country’s customs administration. Effective customs administration is simply necessary to help expedite the country’s socio-economic growth.  Such administration can positively contribute to such growth as it has a direct correlation with internal resource mobilization and facilitation of international trade. 

Shishir Kumar Dhungana, Revenue Secretary at the Ministry of Finance

Realizing this, the government is taking some vital measures to make the country’s customs administration more efficient, service-oriented and transparent. Policy intervention is one such measure as per which the Anti-Dump Act is being enforced. Such implementation is necessary to help reduce the import of low-quality goods.

 In the same vein, the Ministry of Finance is mulling over a new custom act that, among others, will have a mechanism of advance ruling. Compared to the existing system of reference price of customs, such a mechanism will facilitate the traders for self-declaration in the valuation of imported goods more than the existing system of reference price for customs.

Nevertheless, the ministry is no position to annul the very system as demanded by the traders. It is because there are still a lot of cases of under-invoicing. For instance, importers are found to be making the bills of the textile even at Rs 1 per meter to evade taxes.

At the same time, the government is making efforts to improve the customs clearance process by enhancing the logistical facilities of customs points.

 in order to simplify cross border trades. Frankly speaking, such efforts are also gradually paying off as evident with a notable rise in the efficiency of such offices.  For example, now as high as 87 percent of the total imported goods receive customs clearance on the very day of entering the country. The government now looks for increasing such rate to 100 percent.

It is an open secret that some unscrupulous traders tend to use the false packaging of imported goods to evade customs duty. There are some instances of them bringing in the spare parts of the four-wheeler brand of Mercedes Benz in jute sacks instead of the original packaging. To check such malpractices, the Ministry of Finance has signed memorandums of understanding with a number of concerned private entities including the Nepal Automobile Dealers Association. The move is helping the customs officials identify the real valuation of the spare parts to impose the duty accordingly.  As a member country of the World Trade Organisation (WTO), Nepal is also obliged to ensure the appropriate valuation of traded goods to ease their cross-border movements.

In a bid to help bolster the tourism business, the government has already waived 50 percent duty on the vehicles imported by tour operators. Similarly, to check the illegal import of poultry products, it has also already directed the customs offices to restrict the movement of refrigeration vans via illegitimate entry points.

The private traders shall reinforce the efforts being made by the government in order to systematize the customs process and ultimately bolster the country’s international trade.  In this regard, we want them to show strong commitment towards fair trade by resisting themselves from dubious activities like the use of false packaging (as stated above) and manipulating the Harmonised Commodity Discrepancy and Coding System (HS Code), among others.

There is a sharp rift between the traders when it comes to the government’s policy on imports facilitation and customs valuations. This is something that is hampering the initiations being made by the government to make the customs administration efficient.  As such, there is a greater need to bridge the division between them by taking needed measures like the enforcement of code of conduct/code of ethics.

-Dhungana is currently holding the post of Revenue Secretary at the Ministry of Finance

Disclaimer: The views expressed by the author are solely his/her own and do not necessarily reflect that of ceotab.com

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