Karachi
\nSalim Valimuhammad, Chairman of the Pakistan Chemicals & Dyes Merchants Association (PCDMA), has exposed rampant exploitation of the Export Facilitation Scheme (EFS), with fraudulent practices reportedly costing the national treasury a staggering Rs. 25 billion. The veteran trade representative warned that the scheme, designed to boost exports, has instead become a pipeline for duty evasion and revenue leakage.
\nPresenting import-export data analysis, Valimuhammad revealed that under Chapters 27 to 32 of chemicals & dyes – particularly 3204 – imports surged by 80% between 2023-2024 while corresponding exports showed no growth.
\n\u201cThis glaring discrepancy proves large-scale duty-free imports are being diverted to local markets instead of being used for export production,\u201d he stated in a press release.
\nThe PCDMA chief provided a detailed breakdown showing that just for Chapter 3204 imports, the government should have collected approximately Rs. 6 billion in customs duty and Rs. 18 billion in sales tax, totalling Rs. 24-25 billion in potential revenue. However, actual collections remained alarmingly low, indicating massive leakage in the system.
\nValimuhammad proposed urgent reforms to curb EFS misuse, including immediate processing of 18% sales tax rebates and customs duty refunds upon receipt of export remittances to improve cash flow for genuine exporters. His key recommendation was imposing a complete ban on duty-free imports under EFS without valid export Letters of Credit (LCs).
\nHighlighting the scheme\u2019s distortive impact on trade, the PCDMA chairman noted a 25% decline in association membership over two years as regular importers couldn\u2019t compete with industries availing duty-free raw materials. \u201cWhile importers pay customs duty, income tax and additional sales tax, some industries get completely tax-free imports under EFS – this discriminatory treatment is destroying the level playing field,\u201d he argued.
\n\u201cDozens of legitimate importers of chemicals & dyes have been forced to shutter their businesses completely as a direct result of these scheme violations.\u201d
\nExpressing frustration over official inaction, Salim Valimuhammad revealed that despite submitting detailed budget proposals to FBR highlighting EFS anomalies and suggesting corrective measures, the association has received no response.
\nHe made a direct appeal to Prime Minister Shehbaz Sharif, Finance Minister Muhammad Aurangzeb and FBR Chairman Rashid Mahmood Langrial to immediately restrict EFS benefits only to actual export production and completely disallow duty-free imports without verified export LCs.
\n\u201cThe current loopholes in EFS implementation are not just causing massive revenue losses but also forcing legitimate businesses to shut down,\u201d Valimuhammad warned, urging the government to take corrective action before further damage occurs to both the exchequer and the formal business sector.<\/p>\n","protected":false},"excerpt":{"rendered":"
Karachi Salim Valimuhammad, Chairman of the Pakistan Chemicals & Dyes Merchants Association (PCDMA), has exposed rampant exploitation of the Export Facilitation Scheme (EFS), with fraudulent practices reportedly costing the national treasury a staggering Rs. 25 billion. The veteran trade representative warned that the scheme, designed to boost exports, has instead become a pipeline for duty […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-487897","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"\n