Karachi, September 26, 2023 – The Karachi Chamber of Commerce and Industry (KCCI) has made a strong demand for a complete ban on the import of recycled plastic.
President KCCI, Mohammed Tariq Yousuf, has called on the government to either include imported recycled plastic in the negative list or impose a complete ban on this item due to the massive volume of smuggled plastic imports from neighboring countries.
READ MORE: BMG Achieves Landslide Victory in KCCI Elections 2023
These illegal imports and misdeclarations regarding their value and quantity have reportedly caused significant losses, estimated at Rs10 to 12 billion in just three months, comprising Customs Duty, Sales Tax, WHT, and other levies. It is feared that this loss may reach Rs40 billion annually.
In a letter to the Federal Minister for Commerce, Industries & Production, Dr. Gohar Ejaz, President KCCI suggested conducting a forensic audit of all recent polyethylene imports over the last four to six months. Importers should be required to explain how payments were made to foreign suppliers for imports from neighboring countries. This measure is expected to have a positive impact on remittances and redirect vast amounts currently channeled through grey channels into the formal banking sector, thereby supporting the value of the Pakistani Rupee in the interbank market.
READ MORE: Pakistan’s Private Sector Opts for Debt Retirement Over New Bank Loans
President Tariq Yousuf argued that there is no logical need to import recycled plastic into Pakistan because the country generates significant volumes of plastic waste and scrap that can be recycled by domestic units. He pointed out that there is no point in importing another country’s plastic waste.
Tariq Yousuf suggested that all imports of polyethylene and polypropylene (HS 3901 and 3902) from neighboring countries should be assessed based on weekly reports from S&P POLYMER SCAN REPORT, which is already practiced by Customs stations at Karachi Port, Port Qasim, and Dry Ports. These materials should be treated as prime-grade, even if declared as recycled plastics or under any other description.
READ MORE: Private Sector Bank Deposits Soar by 21% as Investors Seek Secure Havens
President KCCI emphasized the need for effective measures against smuggling and undervalued imports, particularly polyethylene (PCT Code 3901). He highlighted the discrepancy between the declared value of so-called recycled plastic ($450) and the actual value of prime materials ($1050 to $1100) that are imported as recycled plastic. Additionally, quantity discrepancies in container or truck loads compound revenue losses.
Tariq Yousuf noted that smuggling and undervalued imports are often financed through Hawala/Grey Channel transfers, diverting foreign remittances away from legitimate banking channels. This diversion has created a significant difference of Rs.20 to Rs.25 per dollar between interbank and Hawala rates, evidenced by a $4 billion decline in home remittances.
READ MORE: Bank Deposits Reach New Record High at Rs 26.11 Trillion
The KCCI’s call for a ban on imported recycled plastic stems from concerns about revenue losses, unfair competition for domestic recyclers, and distortions in foreign remittances. These issues are seen as affecting Pakistan’s economy negatively, leading to the demand for stricter measures against such practices.
