Azeem Ahmed Khan

The Pakistan Tea Association (PTA) has urged the government to take notice of an alarming decline in the legal tea imports, which is rapidly depleting the government revenue.

Talking to WealthPK, the PTA Chairman Muhammad Altaf claimed that the drop in legal imports had resulted in a revenue loss of Rs3.23 billion in the last quarter of the Fiscal Year 2024. He further revealed that over the past eight months, illegal channels had diverted 29.67 million kilograms of tea, causing a loss of Rs13.84 billion to the national exchequer. To plug revenue leakage, Altaf recommended eliminating all exemptions granted to the dry ports, the Federally Administered Tribal Areas (FATA), the Provincially Administered Tribal Areas (PATA), and under the Export Facilitation Scheme. According to him, these schemes have been misused and have become significant sources of financial loss.

The chairman also urged the government to limit tea imports under PATA/FATA to 4 million kilograms, aligning with their population of 4 million people. Calling for stricter regulations at the dry ports, he emphasized the need to prevent the misuse of this facility and suggested that the PTA be granted authority to conduct both quantitative and qualitative checks. He further demanded an immediate halt to the re-export of tea, warning that the estimated annual revenue loss from this practice was expected to rise significantly.

Altaf demanded that the Minimum Retail Price (MRP) SRO 1735(I)/2024 should be withdrawn immediately, as basically it was not applicable and unjustified on tea, which was imported in bulk packing from 5kg to 80kg for further processing. Tea is an essential commodity and should be classified accordingly in the Customs Tariff, he said. It is recognized as a staple food by the Pakistan Bureau of Statistics and is a part of the Sensitive Price Index (SPI), highlighting its significance in household consumption.

Ensuring fair taxation on tea will help maintain affordability and stability in the market, benefitting consumers, tea trade and the industry, he added. To support tea trade and reduce illicit imports, Altaf proposed reducing the Customs Duty from 11% to 5%, abolishing 2% Regulatory Duty, lowering the Sales Tax from 18% to 10%, and cutting the Withholding Tax from 5.5% to 2%. The PTA is an independent, non-profit organization, representing tea packers, indenters, and traders in Pakistan.

Credit: INP-WealthPk