Enterprise System Bus solution slashes Pakistan Customs tax and duty losses

Enterprise System Bus solution slashes Pakistan Customs tax and duty losses

Project Overview: 
Introduction-About Pakistan Customs

Pakistan Customs is the guardian of Pakistan borders against movement of contra band goods and is facilitator of bona fide trade. It provides a major source of revenue to the Government of Pakistan in the form of taxes levied on the goods traded across the borders.

Need Analysis

The trade data exchange mechanism between Pakistan Customs and International Customs was previously inefficient and languid because of multiplex and disparate systems and applications. Inadequate access to mission-critical information resulted in snail-paced decision making and disorganized business processes. Frequent and large scale smuggling of goods was reported in a study conducted by FBR indicating the severe loss of revenue to the Government of Pakistan and distortion in market prices and industries. The daunting scenario coupled with administrative issues led to severe delays in cross-border goods transportation directly affecting traders’ businesses. This stirred an urgent need for a centralized messaging backbone in a complex communication and business environment.

Robust Solution- Enterprise Service Bus

To efficiently meet these challenges, FBR approached Systems Limited for an effective and sustainable solution. After detailed consultation and deep analysis of their existing business processes, Systems Limited developed a secure electronic data exchange solution that fulfilled FBR’s operational and administrative requirements.

The solution was designed to facilitate a secure, real-time transmission of detailed information on the import, transit, and export of cargo goods between other trade organizations. It provides a comprehensive platform for integrating Pakistan Customs’ existing systems with various heterogeneous technologies of 5 external partners namely; China, Afghanistan, IATA, Sea Terminals, Air/Off Docks. Systems Limited proposed the supply, configuration, installation and support of Enterprise Service Bus (ESB) technology based on IBM Integration Bus.

In its first phase of rollout in May 2016, the customs authorities of Pakistan and China gained the ability to securely exchange data in real time across a centralized and unified architectural platform. As a part of the China Pakistan Economic Corridor (CPEC) agreement, this ESB solution will play a major role in trade operations between the two countries. Subsequent phases of the project will allow integration and data exchange with the International Air Transport Association (IATA), customs authorities in Afghanistan, sea terminals, air-docks, and off-docks.

As the information interchange demands and capabilities of Pakistan Customs continue to grow, this data exchange solution will serve as its messaging backbone.

Strategic Benefits

With implementation of ESB for electronic data exchange, Pakistan Customs will benefit from the following:

  • Increased agility and accelerated communication between Pakistan Customs and its external stakeholders allows speedy cross border trade
  • Real-time linkages and information of cargo goods will ensure timely decision making
  • Scalable solution to build future integration needs for data exchange
  • Access to advanced information resulting in efficient detection of frauds
  • Greatly reduced revenue losses by swift detection of under invoicing or under declarations
  • Automated processes minimized human intervention/errors and improved overall controls and monitoring
  • Secure transmission medium guarding information against unauthorized data changes
  • Easier post clearance audit and streamlined rebate and refund claim processes

A summary of improvements in tax collection is provided below.

Collection at import stage (in Rs. Million)

 

2014 – 2015 (Jul – Dec)

2015 – 2016 (Jul – Dec)

Growth

Customs Duty

135,297

179,383

32.58%

Sales Tax

274,766

320,378

16.6%

Withholding Tax

73,786

88,321

19.7%

Federal Excise Duty

8,172

6,377

-21.97%

TOTAL

492,021

594,459

20.82%

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