Afghan transit trade ‘hurting Pakistan's economy’

FBR report blames the agreement for black marketing

LAHORE: The Directorate General of Trade functioning under the administration of Federal Board of Revenue (FBR) has revealed in its report that the Afghan transit and the Afghan imports were negatively affecting Pakistan's economy and were the basic components of black economy in Pakistan.

It was stated that Afghanistan was deliberately not providing complete and correct data of its import to the international institutions.

The details provided by Afghanistan to the UN's sub-body of International Trade Centre puts the value of imports several times less than the actual figures which is an attempt to negate the objections raised by Pakistan against Afghanistan pertaining to smuggling.



The Afghan government has put the value of Afghan Transit Trade passing through Pakistan at $14.8 billion for the current year, while according to Pakistani valuation framework the value comes to $44.4 billion.

According to the report, mere stopping of smuggled items in the market would not yield results but there is a need to take stringent measures at zero line (border along with Iran and Afghanistan) to curb smuggling in cooperation with customs, Rangers, coastal guards and armed forces of Pakistan.

The report further said that "Bara markets" set up in big cities must be shut down immediately where smuggled items worth billions of rupees were being sold and a new mechanism to discourage bogus sales tax registration and import licenses needed to be introduced.

The report identified the goods declaration, duty assessment and anti-smuggling system of Pakistan to be ineffective.



According to details, FBR chairman a few months back had held a video conference with customs officers across the country with the purpose of eliminating smuggling.

During the conference, many senior officers said that the Afghan Transit Trade and especially the overall imports of Afghanistan were a big source of smuggling in Pakistan and for this reason Pakistan had a black economy. They opined that until the issue was addressed, Pakistani economy could not improve.

According to sources, the FBR chairman had directed the director general to prepare a comprehensive report on Afghan Transit Trade.

The report said that Afghanistan imports 28% of its total valued goods to Pakistan through Torkhum and Chaman routes, 37% through Iran's area Islam Qila and 26 %o via Uzbekistan's area Heman.



The overall scenario of Afghanistan’s import changes with the diplomatic and trade ties with its neighbours, tariff policy and border situation.

The report revealed that Afghanistan was showing its import value less to the UN's body International Trade Centre.

Pakistan customs estimates the cost of Afghan Transit Trade items with the intention of carrying out its insurance which is based on tariff of the goods and this is the actual cost that would be considered if Pakistan imports them.

Surprisingly, the Afghan authorities show a value of Afghan Transit Trade to Pakistan which is three times less than the real price just as Kabul put the value of transit trade through Pakistan at 0.82 billion dollars in 2016. However, according to Pakistan customs value additional table, the real worth was 2.9 billion dollars.