The local tyre and rubber industry has urged Finance Minister Ishaq Dar to take notice of huge under invoicing in imports of different types of tyres which deprives FBR of huge revenues on the one hand and badly affects the local production on the other. The industry believes that the said action against the import of under invoiced tyres and increase of Import Trade Price (ITP) by FBR will result in many benefits like increased revenue collection of approximately Rs 5000 million every year for government- over and above what is being collected now.
'This under invoicing of tyres being imported from China is posing a great threat to the national industry and the economy. The FBR was directed by Finance Minister recently to take appropriate action against this practice but the authority (Custom Valuation Department) has not yet acted on the same and the illegal practice continues, said a source in the industry.
In July last, the rubber and tyre industry of the county had written to the Finance Minister regarding the heavy under invoiced import of tyres which is robbing the government of legitimate dues and affecting the local tyre industry to the extent of its survival. The Finance Minister promptly ordered for appropriate action, but the industry is yet to see results of the same.
The source said, "besides written communication, many meetings have been held at "custom valuation offices" over the past couple of years, proofs given to them and mistakes in valuation pointed out, but to no avail.
The industry urged the Finance Minister to increase the present level of import trade prices on tyres/tubes by at least 50 percent in case of all imports from China and by 40 percent on imports from elsewhere.'
'Unnecessary delay in rectifying the heavily under invoiced ITP by the FBR is depriving the country of much needed revenue. The importers are getting tyres cleared in "others" category in order to pay less duty. The number of such tyres has grown to almost half a million, causing a great loss to the country,' added the source.
Smuggled and under-invoiced tyres account for approximately two-thirds of the market share in comparison to the minimal one third which is enjoyed by the local tyre industry.
This menace is not only putting huge dent in the national exchequer but it is also undermining the efforts of the local industry to provide employment, contribute in saving of the foreign exchange and attract local and foreign investment. Moreover, other industries are also affected due to this uneven playing field, he said.
If government focus its attention to these illegal traders, it could not only bring relief to itself but will also make it self-reliant as it won't be losing as much as $80 million per year on account of smuggling and under-invoicing in case of tyres, the source said.
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