Pakistani traders making $2 billion imports monthly by misusing Afghan transit trade

Pakistani traders making $2 billion imports monthly by misusing Afghan transit trade

KARACHI: Pakistani traders misusing Afghan Transit Trade by importing about $2 billion worth import monthly, claimed by Malik Mohammad Bostan, Chairman Exchange Companies and Forex Association of Pakistan at a press conference on Monday.

Bostan said that Afghan transit trade incurred huge financial losses to Pakistan. “A huge outflow of dollars from Pakistan is being done through Afghan transit trade. In this misuse not only Afghan traders but Pakistani importers are also involved,” he said.

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He explained that the Pakistani government imposed restrictions on imports of luxurious and non-essential items and levied huge import duties to discourage the imports. “Our importers have connections in Dubai, London, Europe, USA, Saudi Arabia etc. where they make payments through Hawala and Hundi (illegal payments) and import goods under Afghan Transit Trade,” he said, adding that these goods meant for Afghanistan but after unloading at Afghanistan those goods return to Pakistan.

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Bostan said that about 15,000 containers cleared under Afghan transit trade during first quarter of the current fiscal year as compared with 3,000 containers on a quarter basis.

“The massive increase in volume of containers raises question. It is clear a huge amount of goods are returning to Pakistan without payment of duty and taxes,” he added.

Chairman forex association said that Pakistan had imposed a ban on luxury items for the last six months yet one can observe all such goods are available in major super markets of the country.

Pakistan collected about Rs 3.1 trillion as import duties last year. But this year the country will not able to collect this amount because there is ban on opening of Letter of Credit (LC) and goods are returning from Afghanistan.

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He said about 3,500 trucks cross borders to Afghanistan from across Pakistan. Bostan suggested that Pakistani government should scan goods under Afghan Transit Trade for monitoring. “This transit trade costing about $1 billion loss to Pakistan on a monthly basis,” he added.

The chairman pointed out that the inflows of foreign remittances to Pakistan fell to $2 billion on a monthly basis from $ 3 billion. “The gap of $ 1 billion is utilizing under Afghan transit trade,” he said and demanded to review the existing transit trade agreement.

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Bostan demanded the government to eliminate cash dollar trade with Afghanistan and only allow LCs trough local currency.

He highlighted exports to Afghanistan and stated that Afghan importers are buying dollars from Pakistan and then payment against exports, which further putting pressure on domestic exchange rate.