Exports from Pakistan were under-reported by nearly $600 million below what China reported and this should be investigated, according to the Pakistan Business Council.
“Following our observations on discrepancies in import values recorded on the International Trade Center (ITC) portal, we compared the export values reported for calendar 2022 by Pakistan with import values recorded by the main trading partners to see if there was a possibility of over or under-invoicing,” it said.
Following our observations on discrepancies in import values recorded on the International Trade Center (ITC) portal, we compared the export values reported for calendar 2022 by Pakistan with import values recorded by the main trading partners to see if there was a possibility of… pic.twitter.com/MW9YjFyuZX
— The Pakistan Business Council (@ThePBC_Official) October 9, 2023
PBC determined that differences in values of all but China were found to be within acceptable limits. “In the case of China, we found that exports from Pakistan were under-reported by US$ 594 Mn or 21% below what China reported as importing from Pakistan. This could possibly be to create funds to subsequently under-invoice imports from China,” the Council stated.
A $594 million shortfall in a year in which Pakistan faced an acute forex crisis needs investigation as does a possible tax revenue loss of Rs. 1.2 billion.
PBC opined that the ITC trade data does not always match, especially with trans-shipment countries like Singapore, UAE, or the Netherlands. The mismatch cannot entirely be ascribed to under or over-invoicing. However, unlike many other countries, due to high import tariffs in Pakistan, the incentive to evade duties and taxes is attractive and there is strong anecdotal evidence of under-invoicing. Hence, the larger discrepancies, such as with China, need to be investigated.
The Council further advocated agreements to exchange information through Electronic Data Interchange. The reason for pointing out discrepancies is to institute changes that reduce the possibility of misdeclaration of trade and misclassification of imported goods to lower tariff lines.
