A study by the customs department on smuggling has revealed alarming statistics for Pakistan.
It estimated that 59% of the total demand for products of over half a dozen sectors of the formal economy, including petroleum, tea, mobile phones and auto parts industry, is met through illicit trade of smuggled goods. The development is in part an explanation as to why Pakistan continues to suffer from low tax revenue, a difficult growth path, and failure to attract investment across various formal sectors.
The Model Customs Collectorate (MCC) Preventive, Karachi investigated 13 commodities prone to smuggling in Pakistan, for fiscal year 2014 and came to the conclusion that 11 of them were severely impacted due to illegal trade.
The MCC Preventive, Karachi report, which was last updated in May 2015, stated, “Approximately 59% of the demand for tyres was satisfied through illegal channels and may have been met through smuggling.”
The customs official, who shared the confidential study with The Express Tribune, said this was the latest report on smuggling in Pakistan, as the concerned department updates the report once in two to three years.
“Around 47% of the demand for tea was satisfied through illegal channels,” it stated and added the share of smuggled mobile phones in the total demand stood at 59%, while the rest was met through formal imports, as the country does not domestically produce cellular phones.
The report stated, “The share of smuggled televisions stood at 57%, while the rest of the demand was met through domestic production (37%) and imports (6%).”