KARACHI, June 19: Pakistan Tea Association (PTA) has shown its dissatisfaction over budgetary measure of slashing import duty by five per cent as it feels that smugglers still have ample chance to dump tea through various channels.

The five per cent cut in duties will have little significance or impact on smuggling as import duty raised by five per cent in 2001-02 budget has merely been cancelled out. In real terms there has been no cut in import duty of tea, PTA said.

Regional chairman, PTA, M. Zainuddin Khan, in a letter to CBR chairman on June 18, said that the PTA had urged the government to reduce the import duty from 30 per cent to 20 per cent or possibly to 10 per cent.

Local tea trade has been suffering for last several years from large scale smuggling and an estimated 35,000 tons of smuggled tea had found way into markets last year, causing revenue loss of Rs2 billion.

He said if duty was reduced to 15 per cent from 30 per cent, more tea would be diverted through legal channel and there would be no loss of revenue.

Former chairman PTA Asghar Ali said that the legalized tea trade has been threatening with extinction if tea smuggling is not checked.

He urged the government to reduce the duty on tea imports to 20 per cent as no slab for 15 per cent exists and then cut the duty to 10 per cent in 2003-04 budget.

Ex-regional chairman PTA Farooq Khawaja said legal tea importers have started clearing their stocks after the budget and looking for new business options as smugglers have started placing huge orders at various international tea auctions.

He said legal tea importers were quite hopeful of phenomenal cut in import duty on tea in 2002-03 budget but smugglers and bureaucrats had again won.