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Under-invoicing, mis-declaration going unchecked: Khawaja Khawer Rashed

Under-invoicing, mis-declaration going unchecked: Khawaja Khawer Rashed

LAHORE: LCCI Senior Vice President Khawaja Khawer Rashed said that smuggling through under-invoicing, undervaluation of goods, misclassifications,  mis-declaration and short landing transit or re-export of goods is going unchecked.

While talking to Customs Today, he said that smuggling has become a big threat for economic growth and any sector has hardly left untouched by this menace.

He said that smuggled goods through the borders of Afghanistan, Iran, China, India and the Afghan Transit Trade form a chunk of the informal economy volume of which ranges between 50 to 60 percent of the formal economy.

He said that it is costing the national exchequer in billions. Markets across the country are flooded with smuggled goods and local industries are struggling for survival as smuggled goods are not only easily available everywhere but are also attracting the buyers who prefer foreign merchandise.

“The causes of smuggling are actually the incentives which motivate people to engage in smuggling. These causes basically arise from the desire of consumers to satisfy their needs. People who use smuggled goods satisfy their need to purchase desired goods. On the other hand, people who supply the illicit smuggled goods seek to satisfy their income needs”, the LCCI SVP added.

Rasheed said that smuggling is also encouraged by the large tax rates difference between neighboring countries. This means that goods are cheaper in one country than other, resulting in enactment of import duties to protect the local industries. This scenario encourages smuggling.

The LCCI SVP demanded of the government to review Afghan Transit Trade agreement as it has become the main source of smuggling into Pakistan. He said that its annual volume has been estimated at over 6 billion dollars, adding that under the cover of Afghan Transit Trade, the Afghan imports are smuggled back into Pakistan with the help of Afghan traders.