KARACHI: Growers and officials in Pakistan’s southwestern Balochistan province — where over 85 percent of Pakistan’s apples are produced — say Iranian apples are being smuggled into the country through the Afghanistan border to avoid import taxes.
Smuggling has long been a feature of trade in Balochistan — which borders Iran — where there is a thriving black market in goods ranging from guns and narcotics to duty-free cigarettes and second-hand Toyotas.
Balcohistan growers say Iranian origin apples — produced and sold at a lower price than the Pakistani variety — are being brought in as Afghan imports, harming local business and making it hard for them to even meet their costs.
By law, trade in Iranian goods must be conducted through the Taftan border crossing or other entry points on Pakistan’s border with Iran.
But officials explained that by sending their produce through the Afghan border instead, the Iranian traders are circumventing the Sales Tax Act 1990, which states that edible goods imported from Afghanistan are exempt from taxes. All other countries pay a 17 percent per kilogram levy on exports to Pakistan.
An importer has to pay Rs56 per kilogram ($0.34) of apples shipped through Pakistan’s border with Iran, and only Rs8 through the Torkham border with Afghanistan, a customs official said.
Akhtar Kakar, vice president of the Balochistan Chamber of Commerce, said traders were evading paying higher taxes by documenting Iranian apples as imports from Afghanistan. Apples were being sent from Iran to Afghanistan and then exported by Afghan traders to Pakistan, he claimed.
Abdul Rauf, a senior official at Balochistan’s Agriculture Research Department, said Pakistan had produced 564,693 tons of apples during 2017-18, of which 480,169 tons (85 percent) were produced in Balochistan.
Customs officials said 55,362.403 tons of apples were imported through the Torkham border in 2019-20.
None of the officials or growers interviewed could specify how many Iranian apples are being smuggled into Pakistan via Afghanistan.
“Growers, who are already depressed by severe climate change, are faced with huge financial losses due to the (illegal) import of Iranian apples,” Samiullah Kakar, a grower in Kan Mehtarzai, a town in Balochistan, said.
Muhammad Salim, a collector of customs appraisement in Peshawar, admitted that Iranian apples may be being smuggled into Pakistan, but said growers might be exaggerating the extent of the problem.
“The illegal flow of Iranian apples cannot be ruled out due to the significant exemption of duty/taxes available to Afghan-origin apples,” Salim said, adding that the origins of agricultural produce, including apples, could not be ascertained through visual or physical examination or even through a lab test.
Salim said the high tax on apples brought in from the Iran border compared to through Afghanistan “provides attraction to unscrupulous elements to push the illegal flow of Iranian apples into Pakistan using different modes.”
He urged the Commerce Ministry to formulate “rules of origin” and prescribe a credible certification mechanism.
“The duty and other import levies structure on apples (should) be reviewed in consultation with all stakeholders so that the huge difference (in taxes) on Afghan-origin apples may be curtailed and balanced to avoid the illegal flow of Iranian apples into Pakistan.”
Kakar at the Balochistan Chamber of Commerce demanded that the government stop Iranian produce from being imported via the Torkham border at once.
“We demand that this be stopped immediately, as the country’s own produce is also available,” he said.
Kakar said it cost a grower Rs800 to produce a crate of apples in Pakistan, which would sell for Rs1,600.
“But when apples arrive from Iran, where it costs far less to farm, the prices drop to Rs1,000 for mountainous apples and as low as Rs400 for apples being grown in plain areas,” he said.
