The federal government is considering fixing the Minimum Export Price (MEP) in respect of all goods exported from the country in consultation with the respective trade bodies.
Sources told ProPakistani that the directorate general of Intelligence and Investigation Customs Karachi has written a letter to the Director Headquarters I&I Customs Islamabad about the across-the-board introduction of minimum export price (MEP).
The Directorate of Customs Intelligence and Investigation Karachi was informed of serious reports of under-invoicing in exports from its sister intelligence agency. Accordingly, the said matter was looked into.
It was found that the mechanism of fixation of MEP below which goods can not be exported out of Pakistan is in place for only 8 categories of items.
The value of exports of the items falling under this MEP regime is only 13 percent of the total exports of the country. This implies that the bench of minimum export price does not formally exist for items contributing 87 percent of the exports of the country.
Further analysis of the exports of the country indicated that there was no linear relation between the quantum of exports in terms of net weight compared to the foreign exchange remitted through these exports.
According to details, $26 billion foreign exchange was remitted against 23 million Net Weight in Tons (NWT) in 2020-21. Similarly, $34 billion foreign exchange was remitted against 97 million NWT in 2021-22.
In 2022-23, $30 billion was remitted against 66 million NWT, and $8 billion was remitted against 38 million tons during the three first months of 2023-24.
Sources said that there is a need for a valuation ruling for all export items, which would ensure fair and uniform valuation of the goods and prevent under-invoicing.
He estimated that this measure could increase to at least $500 million in the export receipts of the country.
Foregoing in view, it is recommended that the directorate general of valuation (Customs) be requested to consider the fixation of MEP with respect to all goods exported from the country in consultation with the respective trade bodies. This initiative may help in curbing the menace of under-invoicing in exports and parallel it is likely to result in a substantial increase in the foreign exchange earned through exports.
The government wants to do a suicide attack against it’s own foreign remittances; how about imposing 5% tax on all remittances.
One in hand is better than two in bush.
@@ See what our neighbors are doing and copy the best practices.