Lahore Chamber of Commerce and Industry for protection of local industry

Lahore, May 13, 2016 (PPI-OT): The Lahore Chamber of Commerce and Industry has urged the government to give shelter to the local industry through restricting import of those products and raw materials which are being manufactured/produced in the country.

In a statement issued here Friday, the LCCI President Sheikh Muhammad Arshad, Senior Vice President Almas Hyder and Vice President Nasir Saeed said that there is a dire need to protect local industry which is not only the biggest source of revenue for the government but is also providing employment to the millions. They said that government should give safeguard to the local manufacturers and strictly discourage the import of those items which are being produced at domestic level.

They said that smuggling is also one of those issues which need to be tackled with iron hands. They said that smuggling has become a big threat for economic growth. They said that not only the trade and industry is loser to the smuggling but it is also causing loss of billions to the national exchequer.

They said that smuggled goods through the borders of Afghanistan, Iran China, India and the Afghan Transit Trade form a chunk of the informal economy volume of which ranges between 50 to 60 percent of the formal economy.

They said that it is costing the national exchequer in billions. Markets across the country are flooded with smuggled goods and local industries are struggling for survival as smuggled goods are not only easily available everywhere but are also attracting the buyers who prefer foreign merchandise.

They said that smuggling is being done in a number of shapes like under invoicing, undervaluation of goods, misclassifications, falsification of documents, mis declaration of country and short landing transit or re export of goods.

“The causes of smuggling are actually the incentives which motivate people to engage in smuggling. These causes basically arise from the desire of consumers to satisfy their needs. People who use smuggled goods satisfy their need to purchase desired goods. On the other hand, people who supply the illicit smuggled goods seek to satisfy their income needs”, the LCCI office-bearers added.

They said that Smuggling is also encouraged by the large tax rates difference between neighbouring countries. This means that goods are cheaper in one country than another, resulting in enactment of import duties to protect the local industries. This scenario encourages smuggling. Administration associated with the excise tax can also be complicated and costly, adding an extra burden on the importer.

They demanded of the government to review Afghan Transit Trade agreement as it has become the main source of smuggling into Pakistan. They said that under the cover of Afghan Transit Trade, the Afghan imports are back smuggled into Pakistan with the help of Afghan traders.

They suggested that in order to control the cross border smuggling, scanners should be installed at the border checkpoints. Once sale of smuggled goods is strictly prohibited, the incentive to engage in the smuggling would be minimized.

They said that effective checking at the Customs check posts can play an imperative role in curbing the smuggling on these routes. The check posts should be established on every 50 to 100 km distance on the roads heading into the country from Chaman and LandiKotal. Multiple check posts would hinder the easy flow of various smuggled items e.g. tyres, hence discouraging easy smuggling of items on these routes. To minimise the risk of connivance, the duties of the collectors should be rotated after short intervals.

The LCCI office-bearers said that only honest and upright officers should be posted at Pak-Afghan and Pak-Iran borders. There should a proper mechanism, using the intelligence department to monitor the honesty of the officers.

For more information, contact:
Shahid Khalil
Information Department
Lahore Chamber of Commerce and Industry (LCCI)
Lahore -54000, Pakistan
Tel: +92-42-111-222-499
Fax: +92-42-36368854