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