The ballpark figure is based on an inspection of three truckloads of commodities imported from third countries

ACC: Bhutan could be losing more than Nu 20 million (M) every day in tax evasion at the country’s largest commercial hub, Phuentsholing.

This estimate was based on the physical verification of three truckloads of commodities imported from third countries that the Anti Corruption Commission (ACC) recently carried out at the regional revenue and customs office (RRCO) complex in Phuentsholing.

Figures were roughly worked out after the customs officials, who verified the goods physically in the presence of ACC investigators, to ascertain if the invoice tallied with the taxation, found that the imported goods were under declared.

A fine of Nu 200,000 was reportedly imposed on one truck, while another was fined Nu 72,000 and a third, Nu 27,000 for declaring under pricing to evade tax.

On an average, each truck evades a tax of Nu 100,000. According to customs officials, they cleared between 200 to 300 truckloads of consignments everyday, excluding countless minivan loads. About six to seven truckloads of consignment are imported from third countries every day.  An ACC official said that, even if the evaded tax of Nu 100,000 is calculated for 200 trucks a day, Bhutan is losing Nu 20M.

While verifying commodities, both ACC and customs officials found that the cartons containing skimmed milk powder, Krematop, imported from Thailand, has more packets than reflected in the invoice.  For instance, although a carton contains 12 packets, there were about 15 packets in one.  There were more than 100 boxes, which were not reflected in the invoice, according to ACC officials. However, they refused to disclose the name of importers.

Kuensel learnt that a truck with consignment sneaked through the customs gate, after entering the regional office on Friday afternoon.

At that time, both customs and ACC officials were reportedly engaged in verifying declared invoices at the clearing section.

Sources said that two trucks, bearing Indian number plates, had reportedly arrived from Bangladesh, and one was verified and cleared from customs.  It was suspected that some customs officials let the truck slip away, because customs officials at the source normally verify the consignment ferried from Bangladesh.

The commission has been investigating the customs and tax administration in Phuentsholing, after they reportedly received complaints of entrenched corruption in the export and import business, in the form of fraudulent trade invoicing.  Such practice is reported to have resulted in huge tax evasion, including outflow of funds because of limited access to INR, and customs maladministration.

Given the complexity of the case, the commission has reportedly pulled its other teams, who were investigating the alleged fraudulent and deceptive practices at the Food Corporation of Bhutan (FCB), and illegal transaction of land in Phuentsholing.

The other team, who was investigating a talc mining case in Samtse, was also pulled in to join the current investigation.

As of yesterday, four suspects, including two customs officials, were released from detention.  Two customs officials and five non-Bhutanese, who were helping and facilitating the clearing agents, are still under detention.

ACC officials had also sealed eight shops and 13 warehouses (godowns) as of yesterday.  The first shop it closed was the JPLP, which is one of the biggest complexes in town, located near the Zangdopelri roundabout on April 20.

An Indian man with a legitimate Bhutanese license owns the JPLP.  Sources said that the Phuentsholing city corporation had reportedly leased the space to JPLP, which was established in the early 1980s.

The shops were sealed to verify and assess the value of declaration.

Sources also said that the commission is reportedly looking into the imported non-taxable commodities, like rice and sugar, to assess if these items really enter Bhutan or not.  They suspect the importers deflect these commodities after claiming INR from banks.

According to trade statistics, 2014, Bhutan imported goods worth Nu 56.5B (billion) last year, of which imports worth Nu 47.5B were from India.

Regional customs director Sonam Dorji said customs usually clears goods after the clearing agents on behalf of importers declare their invoices, which contains the details of goods.

He said that the customs inspectors and officials, who work from 6am to 10pm, were being monitored regularly. “Moreover, we have a shift system in place to make sure that our employees don’t work in the same place,” he said. “This is to ensure that they don’t involve in malpractices.”

By Rinzin Wangchuk, P/ling