Trade Reform on the Move

The government is cracking down hard on traders and exporters who have been trying to avoid paying proper customs tariffs through fraudulent acts. If they're caught intentionally cheating, they could face cash penalties up to 200 percent. The new changes have been made in line with the rules of the World Trade Organization. The new Customs Act 2025, which the President approved a few months back, came into effect last Saturday. Given a high number of traders cheating on paying proper customs tariffs, many say that the new law should have come quite early. The law aims at stopping rampant revenue loss caused by undervaluation of goods, using fake papers, or abusing tax breaks. Traders who try to get away with fake documents or changing details to get tax money will now face big penalties, maybe even a jail term, from half a year to a year, or both. Exporters who misinform about the quality or amount of goods will have to pay penalties that equal the complete value of the goods. Authorities can also confiscate the cargo items. With the new law, the government appears serious about revenue leakage. Earlier, the penalty was only 50 percent, but now it has been raised to 200 percent. Meanwhile, government officials who are guilty will face fines from Rs 10,000 to Rs 50,000, or up to a year in jail. Meanwhile, the new law has added a fourth customs lane called the blue lane to the existing green, red, and yellow lanes. Trusted traders in the green lane clear goods without checks, the red lane reviews documents only, and the yellow lane checks both goods and paperwork. The new blue lane brings post-clearance audits, so shipments can still be reviewed after release.