Rs29 billion smuggled goods seized in July-Dec

ISLAMABAD: Pakistan Customs has seized Rs29 billion worth of smuggled goods during the first half of the current fiscal year, The News reported.

 

“Considerable progress has been witnessed in the value of seized smuggled goods,” said a spokesperson of the Federal Board of Revenue (FBR).

 

“Smuggled goods valuing Rs29 billion have been seized from July to December 2020, showing 37 percent increase in comparison with the seized smuggled goods of previous year in the corresponding months valuing Rs21 billion,” the spokesperson said.

 

Pakistan Customs has intensified the countrywide operations against the transportation and marketing of smuggled goods which has lessened the negative impact of smuggling on the economy. “Moreover, these operations against smuggled goods have safeguarded the interests of local traders who are engaged in lawful trade,” said the FBR official. In July-December, the FBR paid Rs5 billion worth of duty drawbacks, according to the tax official. Smuggling has been an uncontrollable menace for the tax authorities for years mainly because taxation issues causing increase in cost of formal trade gives untaxed businesses a ground to flourish. This causes a profuse drain on the exchequer and widens income disparity by encouraging business expediency.

 

Informal trade is commonplace on the border areas neighbouring Afghanistan, Iran and China. Mostly informal trade takes place on the border area of Khyber Pakhtunkhwa. So much so, informal trade volume in these areas is only second to the industrial city of Karachi’s hustle and bustle, a local analyst said.

 

“From cars to agriculture products and household items, you will see everything being traded there,” he said during a media talk last week. Analysts agree that illegitimate trade cannot be curbed without removal of unfair trade practices. Unless prices come to the reasonable level with the government rationalising taxes and reining in market exploiters, they said it will be difficult to take over the illegal trade, they said.

 

The government initiated a policy to reduce tariff anomalies and reduced duties on products to spur manufacturing.

 

Illegal trade plagues all the major economic sectors, depressing tax revenues and dissuading sustainable investment, according to the Overseas Investors Chamber of Commerce and Industry (OICCI) that represents 189 local subsidiaries of companies from 35 countries. There is not a single study to identify the complete magnitude of illegal trade in the country. But, it is estimated that approximately 60 percent of the total demand for products of over half a dozen sectors of the formal economy, including petroleum, tea, mobile phones and auto parts, is met only through smuggling, OICCI said.

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