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ISLAMABAD: The prices of ghee and cooking oil cannot be reduced without rationalisation of duties/taxes, but the influx of smuggled Iranian cooking oil into Pakistan remained unchecked at border areas.

Talking to Business Recorder here on Tuesday, Abdul Waheed, spokesperson of Pakistan Vanaspati Manufacturers Association (PVMA), said that despite ongoing smuggling of the Iranian cooking oil, no visible action has been taken by the concerned agencies.

Due to the 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.

It is a 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, he said.

"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."

He further said that the documentation is the top priority of the country and smuggling of un-documented Iranian products in the market is a serious matter of concern for the existing tax machinery.

In this connection, the association has written a number of letters to the concerned authorities including the FBR.

The action under the relevant anti-smuggling laws is immediately needed to save the local industry and of course revenue of the country, he maintained.

Waheed stated that 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 said.

Copyright Business Recorder, 2022

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