KARACHI: Afghanistan’s tea imports from Kenya have increased 95 per cent in the first quarter of 2010 compared to the same period last year.
Kenya placed Afghanistan on the third position on the list of biggest tea importers with a purchase of 17.3 million kg, up from 8.8 million kg last year. Tea importers in Pakistan say that Afghanistan’s increasing tea imports are unusual because black tea is not consumed there. A large quantity of this tea is smuggled back to Pakistan after being imported for Afghanistan under the Afghan Transit Trade (ATT) agreement, tea importers said.
“We have suggested to the government to cut the 10 per cent import duty on tea, which will help reduce smuggling,” said Pakistan Tea Association (PTA) Chairman Hamid Saeed. “Since it is a known fact that the share of illegally imported tea has crossed 50 per cent, we believe that a cut in duties will encourage imports through legal channels,” said Saeed, adding that this will prove to be a win-win situation for both the tea industry and the government.
If the government reduces import duty, not only the prices of packaged tea decrease but also legal imports will increase, hence increasing the government’s tax collection, explained Saeed. When asked that the Federal Board of Revenue’s (FBR) intelligence department has planned to conduct raids on big tea shops in Karachi, he said illegal importers will certainly resist such raids and the government has all the options in this regard. The intelligence department raided tea godowns in Karachi recently and recovered millions of kilogrammes of tea.
However, FBR officials say that shopkeepers who have huge amount of tea in shops were resisting raids. “Afghanistan’s tea imports are increasing because more tea is being smuggled from Afghanistan to Pakistan. And this is all under the Afghan Transit Trade (ATT),” said PTA’s former chairman Hanif Janoo. Afghanistan is also importing large quantities of tea from Vietnam and India.
Since it is not possible to identify whether a tea is legal or illegal, smuggling of tea from Afghanistan to Pakistan is increasing sharply right under the nose of the government, added Janoo.