Afghanistan imposes heavy taxes on Pakistani flour

Mill association asks both govts to remove hurdles faced by APTTA.

PESHAWAR: The imposition of taxes on flour and other wheat products exported from Pakistan by Afghanistan has caused the Pakistan Flour Mills Association (PFMA), Khyber-Pakhtunkhwa (K-P) some concern.

“They are charging heavy taxes at Gumberg check post and other places on flour and other wheat products which are exported to Afghanistan,” said the association’s provincial chairperson Naeem Butt. The chairperson chaired a meeting held on Sunday by executive committee of the association at its office.

The committee has asked the authorities of Pakistan-Afghanistan Chamber of Commerce and Industries as well as the governments of both countries to remove hurdles faced by the Afghanistan Pakistan Transit Trade Agreement (APTTA).

While Afghanistan has a high production of wheat, few functioning flour mills leaves the country more dependent on Pakistani mills.

During the meeting, the PFMA decided to send a delegation comprising businesspersons and flour mill owners to ask the Afghan government to clear the way for bilateral trade and encourage exchange under the APTTA. Through the visit, the delegation hopes to be able to solve the matter with Afghan flour mills, the owners of which have objected to the export of the product from the neighbouring country. One of their reservations is that the demand of flour produced at their mills will fall if the government continues to import from Pakistan.

Afghanistan does not have a proper taxation system due to which heavy taxes are charged when flour is exported there, said Butt. “The Afghan government has to formulate a proper customs tariff; the imposition of heavy tax will only damage trade relations between the two countries.” The mill owner added, “Such taxes are illegal and will only promote smuggling and ‘parallel’ trade.”

Published in The Express Tribune, December 15^th, 2014.