PAJCCI as a lead chamber on barter trade committee across the border has conducted stakeholders meeting in last few weeks to deliberate robust and sustainable mechanism. The meetings have resulted in preparing recommendations for the both governments however due to unique dynamics of PAK-AFG trade, prevailing State Bank of Pakistan policies, FATF sanctions, refusal of banks to process third party payments, non-operational banking channels in Afghanistan, limited border crossings & operations while lack of necessary infrastructure, low foreign exchange reserves in Pakistan, issues in sales tax refunds and duty draw back claims in case of trade in PKR and land routes is already crippling business across borders.
Keeping in line with this, it was urged to extend the waiver on E-Form and EIF requirement for further 6 months and issuance of necessary SRO to ensure that sales tax refund and duty draw backs claims are processed in case of PKR trading and without E-Form and EIF requirement. To devise alternate mechanism like barter trade these obstacles will remain in the way of regularizing as momentum via land routes will further enhance, while missing refunds and duty drawbacks will garvely affect Pakistani businesses as they will not be competitive in Afghanistan market.
Devising competitive and business friendly barter trade mechanism will take time, It will also require updating Pakistan Single Window system with option of barter trade supporting the easy processing of sales tax refunds and duty draw backs in case of exports, special module and handling by Pakistan Customs and till that period PAJCCI strongly urges Ministry of Commerce to extend waiver to suspend E-Form & EIF requirement till 31st December 2022 along with necessary SRO issuance for processing of Sales tax refunds and duty draw back claims in case of PKR trading categories and trade via land route. In addition, the items in PKR trading category must be increased to continue the trade while generating revenue. Increasing items in this category will reduce the need of foreign exchange on both sides effectively.
Zubair Motiwala; Chairman PAJCCI said that improving border infrastructure and opening of additional border crossings is a matter of priority in current situation where effects of economic crunch are being faced by region and especially Pakistan & Afghanistan. Approval of operationalizing cross stuffing and de-stuffing is also awaited from Government of Pakistan which was proposed in first quarter of Year 2022. This will ensure that traders do not face detention and demurrages charges and bring competitiveness and cost-effective business activity.
He established that business community is already facing delays and issues in bilateral and transit trade & barter trade with Afghanistan will only be successful if trade barriers are removed. He reiterated that additional borders especially the ones like “Nawa Pass” is opened for movement which can bring revenue and economic uplift for the people of Swat.
Motiwala added that delaying trade related decisions will aggravate the economic crunch, will increase unemployment especially in border areas, create unrest in business community and instead of taking advantage of cost effective trade like coal from Afghanistan will result in high import bill which government is trying to reduce.