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Afghan-Pakistan Transit Trade Agreement.

Pakistan, Aug. 13 -- Smuggling-prone items troubling government

ISLAMABAD: The government seems to be in a fix that how to tackle the issue of smuggling-prone items as reduction in import duty on smuggling-prone items would result in increase in imports and create a balance of payment problem as well as loss of revenue on account of reduction in import tariff.

Despite the initial signing of Record Note on the proposed Afghanistan Pakistan Transit Trade Agreement (APTTA), the government as well as private sector are still concerned about the smuggling of goods imported under existing transit trade agreement between the two countries.

Private sector strongly feels that reduction in import tariff on smuggle prone items is the only solution to discourage the smuggling under the garb of ATTA and they are also of the view that increased legal imports would compensate the fall in reduction in the rate of import tariff.

The Ministry of Commerce is also supportive to a large extent of the demand of the private sector for the reduction in import tariff of smuggling-prone items and had been opposing the imposition of regulatory duty on luxury items imported in the country.

The viewpoint of the Commerce Ministry was based on the fact that imports of such products witnessed a sudden jump under ATTA after the imposition of regulatory duty on the import of such luxury products. Imposition of regulatory duties have not only deprived the country of due revenue that was to be realised upon their legal imports in the country but also incentivised the Afghan importers to import such products under ATTA and smuggle back into Pakistan for higher gains.

On the other hand, economic managers view this situation from a total different angle and they have slapped regulatory duties on import of luxury items to discourage their imports so as to avoid pressure on foreign exchange reserves of the country.

The tax authorities that are already faced with a tough task of revenue generation in a difficult economic scene in the country right from the start of this fiscal year - are not willing to entertain any request from private sector for reduction in import tariff on smuggle prone items.

The tax authorities are more concerned about the revenue that is their prime responsibility and are extra careful while entertaining or examining any proposal for the reduction in import tariff on smuggling-prone items.

The authorities are of the view that data provided by the private sector in support of their demands is normally the interest of the private sector alone and does not establish any reason for consideration in reduction in import tariff on smuggle prone items.

The tax authorities have informed a recently held meeting of the national assembly standing committee that they could only do the thing that they could evaluate the revenue impact of any tariff reduction on smuggle prone items and convey their calculations to the finance ministry for consideration and decisions.

The private sector is demanding reduction in import duty on tea, tyres, electronics, electric appliances and other many other products so as to protect the local industry of the country.

Published by HT Syndication with permission from Daily Times. For any query with respect to this article or any other content requirement, please contact Editor at htsyndication@hindustantimes.com

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Publication:Daily Times (Lahore, Pakistan)
Geographic Code:9PAKI
Date:Aug 13, 2010
Words:559
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