All Pakistan Customs Agents Association (APCAA) has said that that around 70 percent decreased was expected especially in the imports of made-up articles due to recent increase in taxes. In a letter sent to Finance Minister Ishaq Dar, APCCA said that smuggling was badly affecting country's economy and the government instead of taking stern measures to prevent the menace had increased tax rate in budget 2013-14 that would encourage illegal trade.
It said that taxpayers were keen to pay taxes but business unfriendly policies were compelling taxpayers to adopt illegal means for survival of their businesses. The measures taken in budget 2013-14 would only give benefit to the smugglers, it added. It said that high taxes would not only erode purchasing power of the masses but encourage smuggling culture.
The letter said that importers of blankets were facing serious financial problems, as last government imposed 25 percent duty and 16 percent sales tax on imports. However, in this budget, the government has further increased taxes. Resultantly, the importers would now have to pay 45 percent duty and taxes on the imports of made-up articles. It feared that if the government did not reduce tax rate to rationale level, the imports of made-up articles was expected to decline by 70 percent in current financial year as imported made-up articles would be entered in the country through illegal channels.
"Although the ultimate sufferers are the common men, it has provided a lucrative opportunity to the tax departments and importers to get huge undue gains," it said adding that the government is expected to face considerable revenue loss in next fiscal year due to high taxes.
If the rates of taxes were not revised, almost 80 to 90 percent of commercial cargos would enter the country in the guise of Afghan Transit Trade or via routed Karakoram border with a fix tax rate of Rs 0.3 million that would only benefit certain taxmen and importers but would create adverse impact on revenue collection and common man's life, it maintained.