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firms, saying the government cannot get rid of the system right
away. The government has done little to equip the customs department
in the past 10 years to replace the PSI firms, they pointed out. But
the government is ambiguous in its stance on the PSI firms. "We will
be in a huge trouble if we cancel the PSI system now," Finance
Minister AMA Muhith told a seminar chaired by National Board of
Revenue ( NBR) Chairman Nasiruddin Ahmed in Dhaka yesterday. At the
same time, Muhith said he is not in favour of the system. It was
introduced in line with a WTO convention on valuation, he said. "The
customs was supposed to replace the system, but it could not do so
due to its inability, " the minister told the seminar designed to take
views from business leaders and customs officials. Gazi Golam
Dastagir, a member of the standing committee on the finance ministry,
said business has improved significantly since the PSI system was
introduced. "The capacity of the customs department has not developed
in the past 10 years. So it cannot take over the PSI firms," said
Abul Kashem Ahmed, acting president of the Federation of Bangladesh
Chambers of Commerce and Industry (FBCCI). "Some 90 percent businesses
support the PSI system, while 95 percent customs officials oppose
it," Ahmed said, quoting a taskforce report on PSI. He said the FBCCI
has suggested extending the service period of PSI firms for another
six months to June 2010. The government may extend their service
period despite their poor performances and irregularities, NBR
officials hinted earlier. Revenue officials were also present at the
seminar on "PSI system in Bangladesh: Perspective and future action
plan". Muhith criticised the NBR for its failure to monitor PSI
activities. No auditor had been appointed in the last 10 years, he
said. Earlier, PSI of imported goods was made mandatory in August
2000 in the wake of growing complaints of corruption and
inefficiency against customs officials. The BNP-led government
appointed four PSI companies -- Cotecna Inspection SA, SGS (
Bangladesh) Ltd, Bureau Veritas BIVAC ( Bangladesh) Ltd and Intertek
Testing Service ( ITS) -- in August 2005 for three years. Later, the
caretaker government in 2008 extended their service period until
December this year. "I don't want the system to run forever. But the
NBR has to develop its own capacity before scraping the deals with
the PSI agencies, otherwise businesses will suffer," said Abdul Awal
Mintoo, a former FBCCI president. Abdul Qaium Khan of Bureau Veritas
said customs revenue has increased by 107 percent in the last one
decade due to the PSI system. The customs officials and the Dhaka
Chamber of Commerce and Industry (DCCI) said the government is
losing revenues and spending crores of taka a year on the PSI
contracts. "PSI system is weakening the customs department. But it's
not possible to replace PSI firms now," said Fariduddin Ahmed,
member, customs administration, of NBR. "We want the PSI system to go
because it takes away our money outside," said Shahidul Islam, a
DCCI director. Mushfiqur Rahman, another customs official, showed in
a presentation how PSI firms cause revenue loss through under- and
over-valuation of imported goods. The government paid PSI companies
Tk 1 ,384 crore between 2000 and 2008 , NBR data shows.
