Foreign-flag vessels have started sailing off Karachi following Pakistan Income Tax Department officials' insistence that vessels declare the name of their owners before entering the harbor, Lloyd's Intelligence reported.

The department is acting on reports of tax evasion by some shipping companies.As a result, shippers have withdrawn vessels that are sailing without valid licenses because they fear arrest, a shipping agent said.

Local business circles believe this could lead to severe shortages of gasoline and imported industrial inputs in the near future.

It was reported that only one vessel arrived at the port Tuesday, and 17 berths were vacant.

The tax department action followed reports that of the vessels owned by Pakistani shippers, more than half are registered in Dubai and European "tax havens."

According to local press reports, the tax authorities have sought information on a prescribed form from shippers, charterers and operators about the details of cargoes, freight per metric ton, the recipient of freight in Pakistan and the name of owners along with documents.

Shipping insiders said the chief loser of the current tussle is the Karachi Port Trust, which is incurring tariff losses daily.

Meanwhile, the Pakistan Shipping Agents Association appeared to be in a defiant mood and refused to oblige the tax authorities.

Non-resident shipping companies are not affected by the current tax recovery drive as the tax department will issue port clearance certificates to them well in advance on the condition that the tax will be paid within due time, shipping insiders added.