Smuggling
and Afghan transit trade: two major threats to the country
One can’t help admiring
the creativity and ingenuity of some of our people. I’m referring to those
worthy citizens who are strictly opposed to following the law, particularly the
law which obliges them to pay taxes. They will do anything to avoid doing so.
In fact, they go to great lengths to make easy money. Just a few days back, the
Customs caught a container which was supposed to contain scrap auto spare parts
on which the amount of duty was very low. Something made them suspicious,
perhaps it was the fact that the importer was eager to get the container out of
the port in a hurry, so they opened the container and found it packed with
cosmetics and dismantled small pickup trucks (the importer would have cheated
the government of at least ten million rupees if he had succeeded in taking out
the container).
Not long ago another
container supposed to contain paper was found instead to be carrying children’s
toys. Sometimes the toys are imported under the description “parts of toys” on
which the duty is only five percent. It’s easy for the Customs to unearth such
misdeclared and underinvoiced items being sold in local markets. Usually, such
things, along with smuggled goods are sold at much lower prices than goods
which have been imported legally. But of course this will require our civil
servants to think out of the box and actually get up from their chairs and
conduct such investigations. And only a fool would assume that they are eager
to improve their performance, knowing that they cannot be sacked for
inefficiency.
Those who have been badly
affected by smuggling (besides the government) are factory owners who have had
to close their industries as they can’t compete with smuggled goods. Thousands
of Pakistanis have been rendered jobless as a result.
It has been estimated that
around a billion dollars worth of goods are smuggled into the country every
month. The government therefore loses six billion dollars every year in duties
and taxes which it would have earned if smuggling were eliminated. And it’s
very easy to crack down on smugglers. Thousands of shops in Karkhano Bazaar
outside Peshawar and the various “bara” markets in all the major cities can be
raided and the smuggled goods confiscated and auctioned off to the general
public. Unfortunately one strongly suspects that smugglers have relatives in
high places in the country, which is why they are virtually untouchable.
A major threat to the country is the Pakistan Afghan Transit
Trade agreement. Goods imported by Afghan businessmen are taken to Afghanistan
in containers from Karachi. Such goods are either removed from the containers
before reaching Afghanistan, or they are smuggled back into Pakistan through
the more than three thousand kilometres long porous border. One way of stopping
this illegal activity is to levy Customs duty and taxes at the Pakistani port
and then refund the same to the Afghan government at the end of the fiscal year
(if Afghanistan provides proof that all such goods were received and consumed
in Afghanistan). This is done by India for all goods meant for the landlocked
country of Nepal. Unfortunately the Pakistan government does not have the will
to enforce this kind of agreement. As a result, massive quantities of tea,
tyres and other items are smuggled into the country from Afghanistan and sold
in the local market, leading to loss of jobs and closure of industries. According
to details provided by Customs, Afghanistan imports tea and tyres in huge
quantities, more than thrice the amount needed by it. The excess quantities of
tea and tyres are then smuggled back into Pakistan.
Even
though the import of betel nuts has been curbed (due to requirement of quality
certificates), rampant smuggling of this item continues and it is freely
available in the country. Millions of our children and young boys are at risk
from consuming ghutka, which is made from betel nuts.
So what will it be? Will our Great Khan make
good on his promise to eliminate smuggling, or will he make another U-turn to
avoid losing the support of some of his ministers? Only time will tell.
The writer is an engineer, a former visiting
lecturer at NED Engineering College
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