There is a 'strictly confidential' report which was commissioned by the Federal Board of Revenue regarding losses in government revenue due to smuggling. I have a copy of this shocking report. It states that in smuggling of only 11 commodities the losses of revenue under the heads of Customs Duty, Sales Tax and Withholding Tax are to the tune of $2.64 Billion. The study does not calculate downstream effect of this damaging effect of this activity.
There is an entire black economy cycle and further revenue losses at every transaction once these goods are in the country. The report states that Pakistan's smuggling to GDP ratio stands at 3.88% which in India is 0.43%. Th items studied are:
- Mobile Phones
- Plastic Granules
- Steel Sheets
My letter to the Public Accounts Committee Chairman is below: