Karachi, May 21, 2021 (Pkrevenue.com) – The Karachi Chamber of Commerce and Industry (KCCI) has proposed a rationalization of tariffs on the import of black tea in its recommendations for the upcoming budget for the fiscal year 2024-25.
The KCCI’s proposal comes in response to the challenges posed by high tariffs and taxes, which have significantly impacted legal imports and driven the market towards smuggling and tax exemptions.
According to the KCCI, Pakistan’s annual domestic consumption of black tea stands at approximately 340,000 metric tons. However, legal imports only account for about 120,000 metric tons. This discrepancy is largely due to the excessively high tariffs and taxes imposed on black tea, which have made legal importation less viable. As a result, a substantial portion of the market relies on smuggling and exemptions, particularly from regions like Ex-PATA, FATA, and Azad Kashmir, which collectively supply around 70% of the legal imports.
The KCCI emphasized that black tea should be considered a raw material rather than a finished product due to the blending and packaging processes it undergoes before reaching consumers. The current tax regime, which treats black tea as a finished product, has pushed legitimate importers out of the market, causing significant revenue losses for the government.
Given the essential nature and widespread use of black tea in Pakistan, the KCCI argues that the tariff structure should be rationalized. This would discourage the misuse of concessions and reduce the incentive for smuggling. As a staple food item in every household, black tea is crucial for the common man, and its affordability is of national importance.
The KCCI’s proposal highlights the need for a more reasonable tariff structure to ensure that black tea remains accessible and affordable. By revising the tariff regime, the government can provide significant relief to the population by reducing the cost of this essential commodity. The KCCI believes that treating black tea as a raw material in the tariff system will help legitimate importers compete effectively, increase legal imports, and boost government revenue.
The KCCI’s recommendations are aimed at creating a fairer market environment that discourages illegal activities and supports legitimate business practices. As the government prepares to finalize the budget for 2024-25, the chamber hopes that these proposals will be taken into consideration to foster economic stability and ensure the availability of affordable black tea for all households in Pakistan.
