LAHORE: Lahore Chamber of Commerce and Industry (LCCI) has called for putting in place effective measures to curb smuggling, which is inflicting huge losses on the national exchequer and local industries.
LCCI President Malik Tahir Javaid said here that smuggling had become a big threat to economic growth and any sector was hardly left untouched by this menace, as the smuggled goods through the borders of Afghanistan, Iran, China, India and Afghan Transit Tradeform a chunk of informal economy, volume of which ranged between 50 to 60 per cent of the formal economy, and it was costing the national exchequer in billions.
He mentioned markets across the country were flooded with smuggled goods and local industries were struggling for survival, as smuggled goods were not only easily available everywhere but also attracting buyers who prefer foreign merchandise.
The LCCI president said that smuggling was being done in a number of shapes like under invoicing, under-valuation of goods, misclassifications, falsification of documents, mis-declaration of country and short landing transit or re-export of goods.
“The causes of smuggling are actually the incentives which motivate people to engage in smuggling. These causes basically arise from the desire of consumers to satisfy their needs. People who use smuggled goods satisfy their need to purchase desired goods. On the other hand, people who supply the illicit smuggled goods seek to satisfy their income needs,” he added.
Malik Tahir Javaid said that smuggling was also encouraged by the large tax rates difference between neighbouring countries, which means that goods were cheaper in one country than the other, resulting in enactment of import duties to protect local industries and this scenario encouraged smuggling.
LCCI President suggested the government to review Afghan Transit Trade agreement as it had become the main source of smuggling into Pakistan, citing that under cover of ATT, the Afghan imports were back smuggled into Pakistan with the help of Afghan traders. He said that its annual volume had been estimated at over $6 billion.
He suggested that in order to control the cross-border smuggling, scanners should be installed at the border checkpoints and crackdown should be launched in the ‘Bara Markets’.
Once sale of smuggled goods was strictly prohibited, the incentive to engage in the smuggling would be minimized, he added.
He also suggested that consumer items should be divided into a number of categories and specific FBR or Customs inspectors should be designated to look after each category, making sure that the products were distributed and sold only by registered companies. Using the data generated by the invoices and warranties of the registered companies, the officials would be able to make sure that only tax and custom duty paid items were sold in all the shops.
He said that a lot of smuggling was done on the land routes of Chaman and Landi Kotal under the cover of transit trade. Effective checking at the Customs check posts could play an imperative role in curbing the smuggling on these routes.
The check posts should be established on every 50 to 100 kilometre distance on the roads heading into the country from Chaman and LandiKotal. Multiple check posts would hinder the easy flow of various smuggled items e.g. tyres, hence discouraging easy smuggling of items on these routes. To minimise the risk of connivance, the duties of the collectors should be rotated after short intervals, he maintained.
LCCI President said that only honest and upright officers should be posted at Pak-Afghan and Pak-Iran borders, and there should a proper mechanism, using the intelligence department to monitor the honesty of the officers. He said that extremely strict punishment should be given to the officials directly and indirectly assisting the smugglers, and there should be a process for rapid and effective prosecution of such officers and they should be banned from holding office in the future.
