Pakistan’s finance minister, Miftah Ismail, has said that the country is losing billions of US dollars through under-invoicing of goods imported from China and the UAE.
The problem is contributing to Pakistan’s widening trade deficit, which reached US$29.8 billion in the first ten months of the current fiscal year, a figure that surpasses the country’s full-year estimates.
During recent meetings at the Federation of Pakistan Chambers of Commerce and Industry, Ismail told members it was important to curb under-invoicing.
The minister underlined that Pakistan and China plan to introduce an Electronic Data Exchange to accurately monitor bilateral imports and exports but noted that its launch has been delayed twice.
Pakistan’s customs authorities estimate that imports from China are undervalued by at least US$4 billion.
Analysts suggest Chinese exporters overstate the value of goods shipped abroad to qualify for tax rebates provided by the Chinese government to encourage exports, but Ismail believes under-invoicing is the problem.
“It is important to curb massive under-invoicing,” the minister said. “China’s records state we import US$16 billion worth of goods, while according to the invoices we receive, we import US$12 billion worth of material from China.”
“We have asked for the documents to see what is happening but they are reluctant to share data. The same goes with the UAE, where the difference is around US$2-2.5 billion,” he added.
Categories: Trade Based Financial crimes News