IMPORTS WITH BLACK MONEY CAUSING RUPEE DEVALUATION

The Union of Small and Medium Enterprises (UNISAME) has invited the attention of the federal finance minister Ishaq Dar to the increasing cost of imported raw materials due to the depreciation of the rupee which has made the SME units uncompetitive and urged him to take notice of the heavy imports with undisclosed money of finished goods, luxury goods and goods under Afghan transit trade which finds its way back to Pakistani markets.

President UNISAME Zulfikar Thaver pointed out that every day millions of dollars are remitted with undisclosed money for under invoicing imported goods from various countries. The undisclosed money is also used for regular imports and there is nobody to question the source. This is causing a heavy buying of the dollar on a daily basis for financing imports.

He suggested that the government take measures to ensure that imports are made with declared legal money and at the same time tighten the Pakistan customs to ensure correct valuation of imported goods which are under invoiced to save on import duties.

Likewise the Afghan transit trade is burdensome for Pakistan as the exchange load and burden is on Pakistan. The Afghan traders operate from Pakistan and purchase dollars in Pakistan from open market increasing demand for foreign currency and in fact dollar is become parallel currency.

The influx of the imported goods ranging from food items, stationery, clothing, footwear, electrical goods and light engineering goods are all paid by transactions which are under invoiced and more than half the invoice value is paid by remittances made from intermediary exchange brokers.

The UNISAME mentor committee (MC) suggested that border trade facilitation banks be set up at the borders of Iran and Afghanistan to promote and support healthy trade and discourage smuggling.

Secondly imports of goods be allowed only through legally accounted and declared money.

Thirdly the under invoicing of imported goods be controlled and import duties be reduced to make it meaningless.

The UNISAME MC expressed confidence in the government and urged it to take immediate measures to save the local industry which is in turmoil since long due to increase in cost of production, poor law and order and energy crisis

Posted in: Press Releases