‘Smuggling needs to stop to reap benefits’

Transit trade agreement leading to smuggling as containers are imported to Afghanistan and then re-routed to Pakistan.

KARACHI: Pakistan will be worse off if it fails to control unabated smuggling through Afghan transit trade for which a new agreement has been signed, said Ashfaq Yousuf Tola, a chartered accountant.

The Afghan-Pakistan Transit Trade Agreement (APTTA) has many faults but the most important one is still the failure to curb smuggling, he said, adding that smuggling causes an annual loss of around Rs250 billion to the national exchequer — a huge burden on the economy. He added that smuggling is also damaging the local industry, especially the tyre and tea industries.

He was addressing a seminar on APTTA at the Institute of Chartered Accountants of Pakistan (ICAP) on Friday.

Tola said that Afghanistan’s imports are huge considering a population of just 29.2 million and when compared to a country like Pakistan which has a population of around 180 million. Most of the Afghanistan’s imports go through Pakistan and are then diverted back to Pakistan through smuggling routes inflicting a massive loss in revenue to the national coffers.

Pakistan imports 600,000 containers every year whereas Afghanistan imports 300,000 containers. With limited local consumption in Afghanistan, the relatively large number of containers reflects how these containers come back into Pakistan after evading duties on ports, he said.

“Until and unless we reduce smuggling from the Pak-Afghan border, we will fail to benefit from the recent trade agreement between the two countries,” he stressed. “The smuggling on Afghan border is also affecting common man in Pakistan since it adds to the soaring inflation,” said Tola and added that the government has been very lenient with Afghanistan in APTTA.

Published in The Express Tribune, November 13^th, 2010.