Afghan uncertainty may adversely impact duty/tax collection: Pakistan Customs

KARACHI: The Pakistan Customs has said that the uncertain political situation in Afghanistan may hamper border trade and adversely impact the collection of duty and taxes.

The Peshawar Customs Collectorate, an arm of the Pakistan Customs, in a report presented an outlook for the ongoing fiscal year 2021/22 and said that the revenue collection at the border crossing area with Afghanistan might be negatively impacted because of “uncertain political situation in the adjoining border areas of Afghanistan”.

The neighbouring country is facing a war-like situation after the exit of the US and allied forces from the country. The Taliban have captured most of the key areas in Afghanistan and are also advancing towards bordering areas with Pakistan.

The Peshawar Collectorate also highlighted the revenue collection would also be negatively impacted due to the downward revision of values of goods.

The collectorate has the jurisdiction over the entry and exit points on the border areas with Afghanistan.

Meanwhile, the collectorate posted 108 per cent growth in the collection of Customs duty in the fiscal year 2020/21. It collected Rs11.90 billion as Customs duty during July–June 2020/21, compared with the assigned target of Rs5.9 billion.

Similarly, Rs35.50 billion has been collected as the total duty/taxes, registering a growth of 64.85 per cent, compared with its last year’s collection.

In its outlook for the present fiscal year, the collectorate said gradual increase in imports and exports clearances reflected that the trade activity is recuperating from the pandemic odds. However, the trends show that dutiable imports will not grow in proportion to the total imports volume, as cotton imports, which are duty-free and are likely to surge in the coming year due to the unprecedented demand from the textile industry.

It also said that the recent trend of upsurge in clearances at Peshawar/Azakhel Dry Port is likely to continue due to the strict anti-smuggling measures directed towards controlling the flow of transit goods and closure/suspension of import clearances from Sust border.

The complete rollout of WeBOC at Angoor Adda would also have a positive contribution, especially in increasing the exports and ensuring minimal revenue leakages from South Waziristan trade route, it added.

The import of duty-free items such as raw cotton has significantly been increased during the last fiscal year and if the trend continues, 70 per cent of imports would be dominated by the raw cotton at the Customs Station, Torkham.

With the pickup in economic activities, the bilateral trade, particularly exports to Afghanistan from border stations are set to increase in 2021/22.

The clearances of industrial cargo meant for industries located in erstwhile Fata/Pata from Azakhel Dry Port may contribute significantly in the annual collection of Customs duty in FY 2021/22.

Moreover, the imports will also likely to appreciate both at dry port and border stations in response to the projected economic recovery in FY 2020/21.

Analysing the growth trend of imports from Afghanistan at the border stations and moving of industrial cargo clearances at Azakhel Dry Port from Karachi ports, the collection of Customs duty in the collectorate are expected to increase significantly in 2021/22.

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