Afghanistan Travel

Smuggling Impact on International Business

Currency is also smuggled from Pakistan to other countries. It happened because of the political situation and some other aspects. Some dealers were getting one dollar at Rs80 from the central bank and selling at Rs82-83 in the Peshawar market. A huge number of Pakistani and Afghan currency dealers are buying dollars in large quantity from Peshawar market and are smuggling it into Afghanistan. Almost 4-5 million dollars per day are being smuggled to Afghanistan. Rising demand of the dollar has further increased its value against other currencies. Because of this, the State Bank had stopped the distribution of the dollar to the trading companies.

Federal Investigation Agency (FIA) has already arrested owners of many major exchange companies, as well as the market leader, Khanani & Kalia, on smuggling of millions of dollars in a foreign country.

Truck tyres are also smuggled on Pak Afghan border because of the difference between the cost to the import tyre and smuggled tyres. Smugglers get Rs3000 to 5000 a large incentive to import this item through illegal channel.

The price variation between a smuggled truck tyre and imported one is Rs3000 to 5000. Smugglers bear an expenditure of around Rs1000 per tyre that covers traveling cost and bribe they pay for secure entry.

The cost of per unit tyres also increased in the overall market and the 5 per cent duty also rose and, the decline in the value of Pakistani currency added more different duties on tyres that included import duty, withholding tax, and, sales tax.

Only way out of this impasse is to cut import duty on truck tyres and government should continue to charge sales tax. because of this truck tyre would die down by Rs1,000.

90 per cent of car tyres are also smuggled into the country because the import tariff on tyres is 35 per cent plus withholding tax and sales tax.

The regional manufacturer does not have the ability to fulfill even 25 per cent car tyre demand of the country. The duty protection is simply encouraging smuggling.

LPG smuggling from Iran is also hurting the local industry of Pakistan.Local industry is being deprived almost 30 percent share of their business because of the smuggling of LPG from Iran. That is also depriving the national exchequer from billions of rupees in term of taxes.

OGRA (oil and gas regulation authority) should take the serious action to stop the smuggling of LPG from Iran. Because unabated smuggling of LPG is also creating hurdles in the development of the market and it also effect the direct foreign investment sector.

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