THE Afghan Transit Trade (ATT) is reflective of inseparable bonds between Pakistan and Afghanistan but its large-scale misuse has often been a source of friction between the two countries. However, latest reports suggest that things have started improving after the Government of Pakistan took a number of measures to address the challenge, an outcome that would surely help strengthen different aspects of bilateral relations besides possibility of making the ATT more vibrant and responsive to the aspirations of the business community of the two countries.
According to a presentation given by the Federal Board of Revenue (FBR) to Prime Minister Imran Khan, imports of black and green tea, tyres, textile and electronic goods under ATT fell by Rs 86 billion or 51% during first five months of the current fiscal year. During July-November 2020, Afghan imports under these five categories stood at Rs 82.5 billion as against Rs 168 billion in the same period of last year and the achievement is attributed to stringent measures adopted by the Government. This is important if one takes into account the fact that last year; the FBR had sought the army chief’s help following up to 600% increase in smuggling of certain goods, which were subject to regulatory duties. The reduction in smuggling under the garb of ATT is having a salutary impact on tax collection by the FBR as during this period official import of these five goods increased significantly in Pakistan. The value of these imports stood at Rs 333 billion, which was up by Rs 119 billion or 56% than the previous fiscal year and as a result taxes and duties on these items increased by 48%. As per conservative estimates, Pakistan suffered a revenue loss of $2.63 billion a year due to misuse of Afghan Transit Trade and it is understood all this was happening with the full connivance of the official machinery. The situation is likely to improve further if the new Interior Minister Sheikh Rashid Ahmad, who has been tasked by the Prime Minister to plug smuggling of Iranian oil within a week, succeeds in tackling the problem effectively. It is also hoped that the border management project being implemented by Pakistan Army would also contribute significantly in checking the menace of smuggling besides discouraging illegal cross-border movement which has also been a cause of friction between the two neighbours.
