LAHORE - The government is losing Rs 2,500 million annually in terms of revenue on the smuggling and under-invoiced import of tyres alone, said industry sources.
Approximately 200 to 225 trucks carrying smuggled goods including tyres come from Afghanistan daily through the Chaman border and each truck usually carries goods worth Rs 10–15 million, added sources. ‘On average, if we take minimum of 200 trucks this amounts to Rs 3 billion of smuggled goods every single day coming into Pakistan, while it stands to Rs 900 billion worth of goods every year,’ said a source. Unfortunately, the source added, the customs authorities are helping this smuggling by taking Rs 100,000 to Rs 150,000 per truck to allow entry without duty/taxes. ‘Thus custom officials make Rs 20 million daily or Rs 240 million annually,’ added the source. The source further added that this is very unfortunate that those who are supposed to protect local industries and national interest are doing huge damage to both the industry and national economy.
 ‘Besides this smuggling issue the local rubber industry is threatened by the heavy import of under-invoiced tyres,’ added the source.
The source further added that it is estimated that due to under-invoiced import of tyres the government loses a minimum of Rs 5000 million annually. ‘This under-invoiced import of tyres is increasing every year. And sadly the authorities concerned are not doing anything to curb this,’ added the source.
The industry has been asking the Federal Board of Revenue and Customs to take effective measures to deal with these two issues that are proving very harmful for the growth of local tyre industry, added the source. To counter smuggling, the industry suggested that FBR should set up custom check posts every 50 to 100 kms on road heading into the country from Chaman and Landi Kotal because multiple check posts will hinder the easy flow of tyres and smuggled goods can be confiscated.
Also, FBR’s Investigation and Intelligence wing should conduct raids on shops selling smuggled tyres. ‘They can start with Rawalpindi and ask for the original invoices to verify import legitimacy. In case of absence of any documents, the tyres should be confiscated. It should conduct raids on Ravi Road truck stand in Lahore to unearth thousands of such tyres,’ suggested the source.
A week later they should stage a similar raid at the same station, and thereafter, such raids should be conducted in Peshawar, Faisalabad, Quetta and Karachi on regular basis to make smugglers retreat and abandon these main consumption centres, said the source, adding that this exercise should continue for at least six months to act as a deterrent and to eradicate the menace of smuggling.
Similarly, to counter under-invoicing it has been suggested to the FBR that a minimum increase of 50pc in import value of Chinese manufactured tyres and 40pc increase in the value of tyres coming from other countries should be the bare minimum increase. ‘If the authorities act upon the suggestions it will increase the government’s revenues by almost Rs 5000 million annually,’ added the source.
Moreover, the source added, it will give a level playing field to local tyre manufacturing industries to invest further, create more jobs, save more foreign exchange and pay more tax while increasing production. ‘It is to provide an environment to other parties to bring in much needed foreign investment,’ concluded the source.