Tea Industry in Pakistan

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Tea smuggling from Afghanistan deprives govt of Rs 152m revenue By Romail Kenneth

KARACHI: The government is annually losing Rs 152 million in revenue due to tea smuggling through Afghanistan, sources in the tea trade said.

Pakistan has a 170 million kg tea market. About 40 million kg of tea is smuggled into the country through Afghanistan under the garb of Afghan Transit Trade.

Sources said price of one kg bag of the imported tea is $2 while same quantity of smuggled tea is sold at a price of $1. The reason of this 100 percent difference is that the legal importers have to pay 15 percent sales tax, six percent income tax and 10 percent customs duty, while illegal tea traders pay nothing to the government, they added. Pakistan Tea Association chairman Hamid Saeed told Daily Times that the business of tea importers was badly hurt due to smuggling of tea. For the last couple of years PTA had been complaining to the authorities by writing letters and reminders to the Central Board of Revenue (CBR) and Anti Corruption Department. Every time it had been told that the authorities would consider this issue and inform PTA of the new government policies. "Last month we also highlighted this issue in a meeting with CBR chairman Abdullah Yousuf," he added.

Secretary Pakistan Tea Association, Khusro N A Farooqi told Daily Times that PTA had approached Director Anti Corruption Department and informed him that smugglers were getting small quantities, which made it difficult for the authorities to check smuggling. PTA urged him to take prompt action against them, to which he replied that for only 20 to 30 bags they could not afford to create any law and order situation.

To curb the problem of smuggling, Pakistan Tea Association and major tea blenders, Unilever, Tapal and Tetley, are demanding that government should abolish all duties and taxes levied on tea imports.

They said the quantum of tea smuggling is rising every year and now it has reached 40...
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