World Bank report had estimated revenue loss of Pakistan of $35 billion during 2000-2009 on account of smuggling, which showed that smuggling was causing huge losses to our economy that should be a cause of concerns for the policymakers. Instead of levying new taxes, government must launch strong efforts to curb smuggling as it was a major hurdle in improving tax revenue of the country. Therefore, the government to take strong measures to curb smuggling as the economy was suffering revenue loss of billions of rupees per annum due to growing phenomenon of smuggling.
Many products are entering Pakistani market through smuggling due to which the business community doing legal business was also suffering great losses. An investigative study of Pakistan Customs on smuggling had revealed alarming statistics as it estimated that 59% of the total demand for products of over half a dozen sectors of the formal economy including petroleum, tea, mobile phones and auto parts industry was met through illicit trade of smuggled goods.
Model Customs Collectorate (MCC) Preventive, Karachi has investigated 13 commodities prone to smuggling in Pakistan for fiscal year 2014 and concluded that 11 of them were badly impacted due to illegal trade. The same study had estimated that the share of smuggled tyres in Pakistan stood at 59 percent, tea 47 percent, mobile phones 59 percent, television 57 percent, auto parts 57 percent, steel sheets 10 percent, vehicles 12 percent, fabrics 17 percent, diesel 33 percent, cigarettes 3 percent and plastic granules 11 percent.
The role of customs officials was key to control smuggling, but the corruption and bribery were major hurdles in such efforts. Many countries have curbed smuggling by utilizing latest technology and urged that the Government of Pakistan should also exploit new technology to cope with this issue. Under-invoicing was also causing great revenue losses to our economy and stressed that government should evolve a new strategy to deal with under-invoicing.