ATT killing potential of agriculture, transport sectors

Trade under the Afghan Transit Trade (ATT) is killing the potential of agriculture and transport sectors, as exorbitant duties and taxes on imported tyres to check the smuggling under it has increased the cost of doing business by and large. The total impact of duties and taxes on agriculture-relating radial tyres is over 60 percent of the total price including 20 percent Customs Duty, 20 percent Sales Tax, 6 percent Income Tax, 2 percent further tax which is sheer injustice to the consumers.
On the transport side, the total tax impact costs over 50 percent. Similarly, the government has levied 15 percent regulatory duty in addition to 20 percent sales tax, 6 percent income tax and others despite, a free trade agreement (FTA) with China.
The market sources 80 percent of shipment under the ATT culminate at Landi Kotal near Peshawar to re-enter Pakistani market. They said the Customs officials were compromising with their duties by letting enter illegal products, including tyres.
The Lahore Chamber of Commerce and Industry Executive Committee member Awais Saeed Piracha said the smuggling of radial tyres under the ATT has distorted the economic outlook of agriculture as well as the transport sector. Piracha further claimed that only 20 percent tyres are legitimately imported while the indigenous industry caters only 35 percent of the domestic need. He said the tyres illegally brought into the country are not only cheaper than the locally produced tyres but also have good quality to satisfy the customers. The local industry is self sufficient in production of two and three wheelers' tyres and the bias tyres. However, the bias tyres are considered to be low quality, he claimed.
He said reliance on the smuggled radial tyres has reached to 45 percent of total domestic consumption. The local manufacturers are yet happy with the 35 percent share in the market by supplying poorly manufactured bias tyres. The industry circles have urged the government to abolish Customs duty on the imported radial tyres to bring down the cost in agriculture and transport sectors. He has further suggested for increasing duty and taxes on the import of two wheeler and three wheeler tyres which would not only protect the local industry but also fetch revenue to the government.