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ISLAMABAD: In a first, Iranian-origin smuggled cooking oil has flooded the domestic market, raising serious concerns to the health of the naïve consumers as well as the legitimate local industry.

In a communication of Tariq Ullah Sufi, chairman, Pakistan Vanaspati Manufactures Association (PVMA) to Advisor on Finance Shaukat Tarin, due to highest applicable tax structure in the region on imports of edible oil in Pakistan (approximately Rs80/kg or Rs80,000/MT) the cross-border smuggling through our porous borders has become very lucrative.

Consequently, the dumping of smuggled cooking oil in huge quantities has been witnessed in the domestic markets, causing not only deprivation of revenue by the national exchequer, but also defeating/challenging the sales of duty/tax paid “Made in Pakistan” products in the domestic market.

Smuggling of food items, forex: FBR likely to brief PM about measures

Unfortunately, the law enforcement agencies, tax offices, district administration and management authorities, besides other registering and licensing regulators are not paying any heed to the issue, hence the legitimate, documented and tax obedient industry is seriously suffering and sustaining irreparable financial losses by losing market share. The attractive profit margins, available to the implied un-documented and grey supply chain of smuggled goods, suggest that the illegal practice is liable to further flourish, if left unattended, he maintained.

It is universally accepted and experienced phenomenon that raw materials and finished goods on which incidence of duty/taxes and other levies are higher in comparison with the regional and neighbouring countries are prone to smuggling and thus, the country is witnessing the same scenario in case of edible oil.

Copyright Business Recorder, 2021

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