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KARACHI: Chairman of the Pakistan Afghanistan Joint Chamber of Commerce and Industry (PAJCCI) Zubair Motiwala has said that delaying trade-related decisions will deepen the economic crisis, increase unemployment especially in border areas, create unrest in business community, and the country instead of taking advantage of cost-effective trade like that of coal from Afghanistan will end up facing a hike in import bill, which the government is trying to reduce.

He said that improving border infrastructure and opening additional border crossings is a matter of priority in the current situation when effects of economic crunch are being faced by the region, especially Pakistan and Afghanistan.

Approval for operationalising cross-stuffing and de-stuffing is also awaited from the government of Pakistan, which was proposed in the first quarter of 2022. This will ensure that traders do not face detention and demurrage charges and bring competitive and cost-effective business activity.

Mr Motiwala maintained that the business community is already facing delays and other issues. Bilateral and transit trade and barter trade with Afghanistan will only be successful if trade barriers are removed.

He reiterated that additional border crossings, especially the ones like “Nawa Pass”, should be opened for freer movement which can bring revenue and economic uplift for the people of Swat.

The PAJCCI, as a lead chamber on barter trade across the border, has conducted stakeholder meetings in the last few weeks to deliberate on a robust and sustainable mechanism. The meetings have resulted in preparing recommendations for both the governments.

However due to unique dynamics of Pak-Afghan trade, the prevailing State Bank of Pakistan policies, FATF restrictions, refusal of banks to process third party payments, non-operational banking channels in Afghanistan, limited border crossings, lack of necessary infrastructure, low foreign exchange reserves in Pakistan, issues in sales tax refunds and duty draw back claims in case of trade in PKR and land routes is already crippling business across borders.

In view of the above, an extension in the waiver on E-Form and EIF requirement was proposed for another six months besides issuance of the necessary SRO to ensure that sales tax refund and duty draw backs claims are processed in case of PKR trading and without E-Form and EIF requirement.

When it comes to devising an alternative mechanism like barter trade these obstacles will remain in the way of regularising things as momentum via land routes will further enhance, while missing refunds and duty drawbacks will gravely affect Pakistani businesses as they will not be competitive in the Afghan market.

Devising competitive and business-friendly barter trade mechanism will take time; it will also require updating Pakistan Single Window system with the option of barter trade supporting the easy processing of sales tax refunds and duty draw backs in case of exports, special module and handling by Pakistan Customs.

Till that period, PAJCCI strongly urged Ministry of Commerce to extend waiver on the E-Form and EIF requirement till 31st December 2022 along with the necessary SRO issuance for processing of Sales tax refunds and duty draw back claims in case of PKR trading categories and trade via land route.

In addition, the items in PKR trading category must be increased to continue the trade while generating revenue. Increasing items in this category will reduce the need for foreign exchange on both sides effectively.

Copyright Business Recorder, 2022

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