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Pakistani team leaves for Kabul to liberalise ATTA

By Khalid Mustafa

ISLAMABAD: A high profile two-member delegation of Pakistan would leave for Kabul for two days to examine the Afghan customs regime before it takes a formal decision of erasing six items from the negative list under Afghan Transit Trade Agreement.

The delegation would comprise Chairman Abdullah Yousaf and Commerce Secretary Tasneem Noorani, which would examine the customs regime of Afghanistan and hold discussion on the proposed elimination of the 6 remaining items in the Negative Lit.

The two-member delegation is going to Kabul under the decision of Economic Coordination Committee of the cabinet (ECC). “Kabul is most likely to raise the issue of transit to Indian for Afghanistan,” the official said.

“Pakistan wants the elimination of the 6 remaining items from the negative list with the condition in case Afghanistan agrees to introduce custom duty and other tax rates on the said six items at par with custom duty and other tax rates of Pakistan.” Both sides would also discuss the proposal of Preferential Trade Agreement.

“The government of Pakistan would also seek assurance from Afghanistan, during the visit of the two member delegation, to implement the enhanced taxation rates through a foolproof system so that the prices of 6 items would be same in both the countries to avoid the smuggling of the said items from Afghanistan to Pakistan.”

The Negative List of six items includes Cigarettes, and cigarettes of tobacco or of tobacco substitute ii) cooking oil, iii) automobile parts, iv) television, v) telephone and vi) and tyres & tubes.

Under this arrangement, Pakistan’s local industry would not hurt, when there would be no difference between the two countries’ rates of customs duty and other taxes.

The official said Ministry of Industries and Production and CBR had been opposed to the removal of six items on the contention if the said six items are given the transit at the existing customs duty and tax rates, which Afghanistan is charging at import stage, then the prices of the said items in Kabul would be cheaper and if the said items are smuggled in Pakistan would be available at cheaper rates, then it would hurt the local industry as on the said items, the custom duty and other taxes are very high which is why the prices of the aid items are very high in Pakistan.

The official said in the negative Lists of 6 items, on cigarettes, rate of CD (Custom duty) and other taxes in Afghanistan is at 16 percent while total tax incidence in Pakistan is at 250 percent. On cooking oil in Pakistan duty is at Rs 9000- 168800/ MT + 15 percent sales tax, on tyres & tubes CD and other taxes in Afghanistan stands at 5 percent and in Pakistan CD is at 25 percent and sates tax is at 15%, on television and parts total duty and taxes stands at 5 to 10 percent in Afghanistan, while CD stands at 25 percent and ST (sales tax) is at 15 percent in Pakistan. Likewise on auto parts, the volume of duty and taxes in Afghanistan are at 5 percent while in Pakistan CD is at 25 percent and ST 15 percent. And on telephone sets Kabul is charging 5 percent duty and Islamabad is charging 25 percent CD and 15 percent ST.

To a question the official said Pakistan would not allow the transit of right-handed vehicles and beetle nuts and the GoP has informed Kabul administration in this regard saying that right handed vehicles are not used in Afghanistan and beetle nuts are injurious to health. The official said that Afghanistan has agreed with Pakistan’s stance on the said new items.

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