7/25/2019 Letter to Chariman PAC on FBR Smuggling Report

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26thJanuary 2016

Mr Khurshid Shah MNAChairman Public Accounts Committee

Dear Shah Sahib,

am attachin! a ne"s item #ublished in a ne"s#a#er titled$

Pakistan Losing $2.63 Billion revenue a year due to smuggling

%he article states that The Federal Board of Revenue (FBR)commissioned the study titled, Ascertain the Market Demand of Goods

rone to !mu""lin" #$sta%lishin" the &olume of !mu""lin"' %ut later

on, termed it strictly confidential'&

%he issue is 'ery alarmin! there(ore "ould li)e to re*uest you that anotice should be sent to +- on this issue (or e.#lanation& ( such are#ort has been "ritten the PAC "ould li)e to ha'e a co#y as "ell as ares#onse on action ta)en&

/ours sincerely,

Dr Ari( Al'i

Member Public Accounts Committee

Pakistan Losing $2.63 Billion revenue a year due to smuggling

SAMAAD$

Pa)istan is losin! a sta!!erin! 2&6 billion "orth o( re'enue a year,due to smu!!lin! o( 3ust 11 !oods that are ma)in! their "ay throu!h#orous borders and, more alarmin!ly, throu!h hi!h sea and

containerised car!o "ith (ull su##ort o( the state machinery, re'eals ahi!hly con(idential o((icial re#ort&%he losses "ere calculated by a!!re!atin! numerous customs dutiesand state ta.es as "ere a##licable at the time o( the study i&e& lastyear&

%he country4s (irst e'er com#rehensi'e re#ort has estimated the 'alueo( these 11 !oods at 5&1 billion& %he re'enue lost in the (orm o(

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duties and ta.es on smu!!led !oods could be (ar hi!her than 2&6billion or -s26 billion, i( the sco#e o( the study is "idened to all thesmu!!led !oods&%he amount is hi!her than the additional ta.es !o'ernment has le'iedin July last year throu!h its second bud!et&

%he study too) into account the im#act o( smu!!lin! hi!h7s#eeddiesel, 'ehicles, tyres, tea, auto #arts, mobile #hones, !arments,ci!arettes, #lastic, tele'ision sets and steel sheets, on re'enues,industrial #roduction, in'estment and em#loyment&%he +ederal oard o( -e'enue 8+-9 commissioned the study titled,:Ascertain the Mar)et Demand o( ;oods Prone to Smu!!lin!7

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t also underlined that the need (or ?en(orcement remains the bi!!est#olicy o#tion Pa)istan Customs needs to #ursue to curb the

smu!!lin!&y curbin! smu!!lin!, the country can increase its ta.7to7;DP ratio byanother &5B to 1B "ithin a year& Com#ared to ndia4s smu!!lin! to;DP ratio o( only 0&B and an!ladesh4s 0&0B, Pa)istan4s ratio isincredulously hi!h, lar!ely o"in! to in'ol'ement o( the +- o((icials,+C, Coast ;uards and Maritime A!ency&?Ma3ority o( the (orei!n in'estment has le(t the country and more islea'in!, as they cannot com#ete "ith the #ro(it mar!ins, "hichsmu!!led !oods !enerate (or those "ho are in'ol'ed, lamented thestudy&%he study notes that reducin! tari((s to curb smu!!lin! has not "or)edthus (arE it has rather had a detrimental e((ect on the domesticindustry, "hich "ould ha'e to com#ete "ith e'en chea#er im#orts&Top smuggled goodsFut o( 2&6 billion losses, the country sustained 1&1 billion lossesdue to smu!!lin! o( mobile #hones& %he estimated 'alue o( smu!!led#hones "as & billion and the smu!!led #hones met 5B o( thedemand&

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%he 2& billion smu!!led diesel "as the second item that causedG million losses, as the country met B o( its total demandthrou!h smu!!led diesel& %he losses "ould !o e'en hi!her (or thecurrent year as the !o'ernment is char!in! an abnormally hi!h rate o(1B ;eneral Sales %a. on diesel&

Smu!!led #lastics caused 222 million losses and ca#ture 11B o( themar)et demand& %he smu!!led auto #arts caused 1G6 million losses,ca#turin! B o( the mar)et& %he smu!!led 'ehicles caused 1million losses and ca#tured 12B o( the mar)et& %he smu!!led tyrescaused 11G& million losses, meetin! 5B o( the mar)et demand&Smuggled vehicles worth s! "illion sei#ed in uetta

%he smu!!led steel sheets !ot hold o( 10B o( the mar)et and caused112&6 million losses& 5B o( the mar)et needs are met by smu!!ledtea, causin! million losses& Fnly B o( the mar)et needs are met(rom smu!!led ci!arettes, causin! 2 million losses&Similarly, the smu!!led tele'ision sets ha'e ca#tured B o( themar)et, causin! 5 million losses "hile smu!!led !arment #roductsha'e ca#tured 1B o( the mar)et, causin! 2& million re'enuelosses&u%lished in The $ress Tri%une, *anuary ++nd, +-./

http://tribune.com.pk/story/1021468/annual-report-smuggled-vehicles-worth-rs9-billion-seized-in-quetta/http://tribune.com.pk/story/1021468/annual-report-smuggled-vehicles-worth-rs9-billion-seized-in-quetta/