Chairman FBR Rejects Claims of Rs. 100 Billion Loss from Faceless Customs System

Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial dismissed the internal audit report that claimed Pakistan’s faceless customs system had caused a Rs. 100 billion loss to the national exchequer. Speaking to the media, Langrial said the report’s findings were incorrect and alleged that some officers and stakeholders had conspired to undermine the system. He acknowledged differences among officials of various FBR cadres but stressed that the faceless system will not be rolled back. Its main purpose, he said, was to curb corruption and bribery. The chairman admitted the system had disrupted vested interests, noting that “many people are upset” and “some are working on a hidden agenda.” He emphasized that FBR had ended the culture of political influence in postings, saying no officer had been appointed in the past year on a minister’s recommendation. Langrial added that under the old manual system, misdeclarations were common with staff involvement, but under the faceless setup, 45 officers working from one hall could not collude as easily. However, he admitted that collusion and bribery had not been completely eliminated. An inquiry has been launched into the leak of the audit report, with action promised against officers who provided false information. Customs officials also confirmed that officers involved in illegal vehicle clearances had faced action. They rejected the claim of revenue losses, stressing that no vehicle was cleared without full duty payments. They cited the example of a Land Cruiser on which Rs. 47.2 million in duties and taxes were collected. Officials said revenue collections had actually increased under the new system. FBR members stated that the faceless system, introduced on the World Bank’s recommendation, was aimed at improving trade facilitation, not revenue growth. They said the audit was ordered internally to identify weaknesses and improve the mechanism, not to prove losses. The report, prepared in July, was leaked before being officially submitted, which authorities described as a serious matter now under investigation. Langrial confirmed that reforms within FBR will continue, acknowledging mistakes but vowing improvements. He said assessment procedures would be further strengthened, with a new cadre introduced for customs assessment. He also noted that demurrage costs had declined and revenue was expected to rise. Officials stressed that the previous manual clearance system will not return. Instead, the faceless system would be enhanced with safeguards against hacking, with committees already formed to hold accountable those who prepared and leaked the “inaccurate” report.