Tyre smuggling costing Pakistan more than PKR 40 billion revenue loss annually
A significant chunk is smuggled from Indian
The illegal trade of tyres has been blowing up, causing billions of losses to the national treasury. Industry stakeholders have claimed that tyre smuggling has been costing more than PKR 40 billion in revenue loss annually.
There is an annual demand for approximately 14 million tyres. Locally produced tyres make 15 percent of that demand. However, 35 percent is met through legal tyre imports, and the remaining 50 percent goes to the smuggled tyre. That is 7 million smuggled tyres; a significant chunk is smuggled from Indian.
The Rise and Fall of Tyre Smuggling
According to the stakeholders, the coronavirus helped stop tyre smuggling. Tyres were being smuggled via Chaman, Torkham, and Taftan borders. When COVID-19 hit Pakistan, over 90 percent of the borders were closed. The only way for smuggling was through the border check posts.
As the COVID-19 border limitations have been lifted, the tyre smuggling business has increased since August. Illegal trade has been affecting the competitiveness of the industry and the revenue of the national exchequer.
The Federal Board of Revenue (FBR) has strict measures at the customs level to restrain any smuggling activities. Yet the industry stakeholders say that is not enough; more effort is required to take down the illegal tyre smuggling business.
The local tyre industry contributes over PKR3.2 billion annually to the national exchequer and provides employment opportunities. However, the smugglers are exploiting the system and causing billion of losses.
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Simple solution- increase local production