Tsunami of smuggling on the horizon as economic difficulties worsen

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LAHORE:

While the federal government has put a complete ban on imports of luxury goods to save much-needed dollars, another ugly truth has surfaced: smuggling.

Even though the economy is in bad shape, smugglers are eyeing huge paydays as they rush to cash in on the crisis. Over the past two years, Pakistan Customs has dismantled large warehouses smuggling imported items into Punjab, but now that the dollar and fuel prices are at historic highs, smugglers are banding together to supply anything , luxury cars, tires, car parts, textiles, powdered milk, tea leaves and cigarettes.

While smuggling negatively impacts government revenue generation goals, it also has detrimental consequences for traders, who believe the government is creating the threat in the first place. Malik Zaman Naseeb, chairman of Azam Cloth Market, the country’s largest textile market in Lahore, told The Express Tribune that whenever a government imposes unjustified taxes or raises their rates and stops imports, smuggling will increase. inevitably.

“Therefore, the government should reduce taxes and give traders confidence before making decisions.” Shehzad Sheikh, a business manager at Shah Alam Market, expressed similar views, saying, “FBR and other agencies estimate that $3.3 billion worth of smuggling occurs every year. However, no government will sit down with traders and come up with a solution against the threat.

Sheikh’s assessment on smuggling carries weight, as Pakistan Customs have so far seized contraband goods worth Rs 61 billion. A breakdown of the gigantic number revealed to The Express Tribune that weapons worth Rs 49.1 million; tea leaves worth Rs 240 million; mobile phones worth Rs 290 million; alcohol worth Rs 400 million; drugs worth Rs 410 million; Gutka worth Rs 527.5 million; cigarettes worth Rs 720 million; electronic devices worth Rs 830 million; wheat and other food grains worth Rs 837 million; tires and auto parts worth Rs 888 million; betel nuts worth Rs 2 billion; fabric worth Rs 5.89 billion; and vehicles worth over Rs 9 billion have all been smuggled. Since most of the smuggling was in unpaid bespoke vehicles, The Express Tribune spoke to Sheikh Yasir, a trader at Lahore Jail Road Car Market, to inquire about the effect it has on the market. “Smuggled foreign-made vehicles are very cheap, which is why there is an increasing trend of people towards them. With the connivance of customs and excise personnel, false documents are also produced for these vehicles.

Due to this double standard, legal traders like us face difficulties,” Yasir lamented. Babar Mahmood Butt, president of the Traders Organization Service Group, had a similar problem with the government stating that smuggling does not take place without government and political support. Butt was of the view that the government should first clean up its own house and take action against the enablers. “Their inaction results in a scenario like this: a trader sells an item with a duty for Rs 1,000 and then the same contraband item is sold by another trader for Rs 500,” a furious Butt said. Collector Customs Enforcement, Basit Abbasi and Collector Customs Allama Iqbal Airport, Usman Bajwa, when asked about the plight of traders, admitted that the current economic situation increased the risk of smuggling, but added that the department was ready to deal with it.

“We have already broken the back of organized smuggling groups across the country and we will do it again. In light of the current situation, we have increased our monitoring and rigor,” they reassured in an interview with The Express Tribune.

Published in L’Express Tribune, June 21st2022.


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