ISLAMABAD: The Special Investment Facilitation Council (SIFC) has directed the Pakistan–Afghanistan Joint Chamber of Commerce and Industry (PAJCCI), a joint representative body of both countries, to convene a joint board meeting to remove hurdles in transit trade and make it more feasible, well-informed sources told Business Recorder.
At a recent meeting with SIFC, Chairman PAJCCI, Zubair Motiwala briefed the forum about current suspension of Afghan transit trade and shifting of trade routes to Chabahar (Iran).
He also highlighted the ban on transit trade that was imposed through various SRO’s, ie, (1401, 1380 of FBR and 1397 and 642 by the Commerce Ministry) and its overall impact on trade.
PAJCCI, SIFC discuss Pak-Afghan trade
The representative of Ministry of Commerce explained that ATT has not been stopped, rather it is being regulated through these SROs. Moreover, transactions have also been documented through banks to curb the smuggling from Pak-Afghan border.
Secretary –Apex Committee stated that Ministry of Commerce needs to address these issues somehow and invited all the stakeholders to minimise the challenges for reviving the transit trade. The delegation raised the issue of Imposition of a 10 % ad-valorem processing fee on Afghan transit commercial goods via Pakistan, in addition to highlighting the SRO 642(1) 2023, which allowed barter trade between Afghanistan and Central Asian Republics (CARs) but it remained unimplemented.
The forum was apprised that the Government is in the process of devising an automated mechanism to regulate Afghan Transit Trade and currently State Bank of Pakistan and Pakistan Single Window (PSW) are working on it to channelize the tax system.
Ministry of Commerce briefed the participants that Afghan side is reluctant and not interested in barter and is continuously insisting on banking channels.
The meeting decided that PAJCCI would convene its board meeting after consultation with the Afghani counter-parts within four weeks and submit joint recommendations to Ministry of Commerce and SIFC. Outcome would be shared with SIFC by January 20, 2025.
It was also decided that the Ministry of Commerce will do a comprehensive study and analyse the impacts of SROs, as overall Afghan Transit trade including barter mechanism in the working group and present recommendations to SIFC by Jan 30, 2025. Further, Ministry of Commerce, would also follow-up with SBPand PSW for an early completion of the project.
The meeting was informed that the banking channels are inactive at the moment. The delegation requested that the Government functionaries may find a viable solution to continue the Afghan transit trade, while taking on board all the aspects of regional issues.
The Director General SIFC stated that the government also needs to address duty issues on various products. Moreover, representative of the SBP apprised the forum about present mechanism being followed on the border terminals for banking transactions. The meeting decided that the State Bank of Pakistan and Pakistan Single Window will expedite and ensure completion of automated mechanism/system for regulation and facilitation of Afghan Transit trade by January 31, 2025.
Imposition of 2 % Infrastructure Development Cess (IDC) by KPK Government: The delegation briefed the forum about concerns of business community on imposition of 2% IDC Cess in Jul 2024 by the Government of Khyber Pakhtunkhwa. The Cess not only increased the cost of doing business but also impacted on exports to CARs and reverse cargo from Afghanistan despite the fact Afghan transit trade is exempted {rom such Cess under Geneva convention.
Copyright Business Recorder, 2025
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