Tax evasion, smuggling: MoC and PRIME update Senate panel

ISLAMABAD: The meeting of the sub-committee of the Senate Standing Committee on Commerce, chaired by Senator Sarmad Ali, was held here Friday.

The Ministry of Commerce and a private organization, PRIME, briefed the committee on issues related to tax evasion, counterfeit goods, and smuggling.

The meeting was attended by Senators Faisal Saleem Rahman and Zeeshan Khan Zada.

The committee was briefed on the basic functions of the Policy Research Institute of Market Economy (PRIME) and was informed that PRIME is essentially a think tank established to assist government organizations in advancing ideas and policies for open trade and economic efficiency in Pakistan through its research.

Dr. Ali Salman, Executive Director of PRIME, highlighted the issue of illicit trade of tobacco, medicines, and other items. He stated that such activities are mostly carried out in the provinces of Khyber Pakhtunkhwa and Azad Jammu Kashmir, particularly in tax-free zones. He added that small units operating in these areas often avoid paying taxes and generate profits through illegal means. He also talked about the menace of smuggling of international cigarette brands which are sold in the market at very cheap prices, without any taxes and without any health warnings.

The Convener of the Committee expressed concerns over the performance of the Federal Board of Revenue (FBR) and Pakistan Customs, which have failed to curb such activities. He directed that all relevant stakeholders be invited to the next meeting.

Senator Zeeshan Khan Zada raised the issue of tobacco smuggling and suggested that a proper debate be held to address the problem. He emphasized that it is a matter of national interest and proposed that the Committee ask representatives from multinational companies, local companies, the Tobacco Growers Association, consumer rights groups, Pakistan Tobacco Board, the Ministry of Health, DG Track and Trace FBR, and IPOR for a holistic and sustainable solution.