00:00The Customs and Excise Division reports that importers are ripping off the state, committing valuation fraud to save big bucks on duties and taxes.
00:11The vast majority of valuation fraud is as a result of avoidance to pay duties and taxes.
00:19And so what we've experienced is importers misrepresenting the value, understating it, so that the amount of duty and tax that they pay is less than what they ought to pay.
00:31And that is a major problem, and it's a very, very large percentage.
00:37Sometimes invoices are under-invoice. We've found by more than 50% of the invoice.
00:42Customs says in some cases, invoices are under-declared by more than 50%, resulting in significant revenue losses.
00:52A large percentage of essential pharmaceuticals are both duty and VAT-free?
00:57Yes, Chair. Based on the suspension.
01:00So that then creates the environment for over-invoicing. You agree with me?
01:07Yes, Chair.
01:08So that if an item costs $10 and you're entitled to forex allocation for the actual cost of $10, because you don't pay VAT and duty and customs duties, you can actually invoice that for $20 to get double the amount of forex allocation.
01:28You agree with me?
01:29Yes, Chair.
01:29The Public Administration and Appropriations Committee also learnt that while Customs is responsible for the regulation of goods coming into the country, the division is not privy to a list of approved pharmaceuticals.
01:44So, Customs has no way of knowing whether an item is permitted to be imported or not permitted to be imported beforehand.
01:54If I may, while yes, the responses to the questions, we receive the answers yes. However, no pharmaceuticals imported are released without consultation with chemistry.
02:10That's not my question.
02:11Meantime, Chemistry, Food and Drugs says it is working on compiling and publishing said list for the benefit of all stakeholders.
02:19So, what you are telling this committee is, by and large, that this list is a secret list?
02:27This has never been published, Chair.
02:30Would you accept that as of now that we could conveniently label this list as a secret list?
02:39Would you accept that?
02:40Well, if it's not published, yes.
02:42Pharmaceuticals have long complained that the lack of transparency has led to the importation of unregistered drugs, many of which continue to be seized.
02:53Meantime, the Fair Trading Commission says it is treating allegations of a pharmaceutical monopoly seriously but must first establish whether the monopoly exists before investigating any alleged abuse.
03:07The Commission says it has requested a formal complaint and will move forward once the necessary data and governance structures are in place.
03:16The simple question to you is this.
03:18When you wrote to them and told them that there were sufficient grounds, why did you tether the power of the Commission to the receipt of a formal complaint?
03:29It's as simple as that.
03:30Well, Chair, we are waiting on a board, and I did not want to advise the board, whenever it's appointed, let us start this investigation.
03:41So, when indeed the board would come in place, I would have advised, and I would still advise, it's very difficult to launch, or illegally we can't do it,
03:50it's very difficult to launch an investigation of this nature without sufficient data and information,
03:54but if the board is so minded, we will indeed launch the investigation.
03:59Renasa Cutting, TV6 News.
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