Dealing with smuggled goods... By Shahryar
05 January, 2013
We have all heard great reports from the Federal Board of Revenue (FBR) and customs authorities telling us how they have reduced smuggling and tax frauds in Pakistan. However, in reality, the FBR has not managed to increase the tax base from 0.5 percent in 65 years while the customs authorities are oblivious to the huge smuggling of goods from China.
In Peshawar, smugglers have proper shops and offices located in huge plazas in Hayatabad, on the Peshawar-Bara boundary, owned by famous smuggling families in Peshawar. For example, in the past year, two new plazas were constructed in this area, which were quickly filled by smugglers of Chinese cloth. In the subsequent months, I noticed how the market was filled with smuggled cloth.
Every day, taxis, wagons and buses were filled with this cloth, which was then smuggled down the country through various established channels. All this when 10 feet down the road the Pakistan customs authorities have established a vehicle check post! I was also amazed to see how these shop keepers started out with empty shops, and how, after one year, they all have filled shops and new cars parked outside.
I should be happy to see the success of fellow Pakistanis but not at the expense of Pakistan, especially when these newly rich smugglers spend their illegal incomes to promote terrorism, as most finance the same charities that support anti-Pakistani forces in Bara. Until the FBR and customs authorities start doing their job, and help stop the flow of money to these terrorist organisations, we in Pakistan will not be able to stop or control terrorist attacks in the country. Also, by stopping the sale of smuggled goods, Pakistan will be able to earn a lot of income from taxes on proper imported goods.
The Pakistani customs authorities can control smuggling by starting a crackdown on these shop/plazas and by also stopping the sale of smuggled goods in other shops located in all main areas of Peshawar. The only reason these items are smuggled around the country is because they can easily be sold in shops around all the main cities of Pakistan. The customs and FBR authorities can use the model of pharmaceutical distribution in Pakistan to control the smuggling of all types of goods.
In Pakistan, medicines are manufactured or imported by registered manufacturers/importers only. The medicines are distributed by licenced distributors only and can be sold by licensed chemists only. There are drug inspectors who make sure that licences are up to date and no illegal items are sold by the registered organisations.
In a similar way, consumer goods can be divided into a number of categories, which can be looked after by specific FBR or customs inspectors to make sure that the products are distributed and sold by registered companies only. With the data generated by the invoices and warranties of these companies, the officials will be able to control the sale of only tax and customs duty paid items in all shops. Reducing the demand of smuggled goods and bringing all imports under the proper tax net is the need of the day.
SHAHRYAR KHAN BASEER