ISLAMABAD, June 5: The tax authorities are considering a budgetary proposal to work out measures for countering under-invoicing, dumping and smuggling of goods.

Official sources told Dawn on Saturday that the proposal was under-consideration following the recommendations of ministry of industry and the relevant stakeholders. The relief measures would be announced in the budget of 2004-05, said the officials.

It was observed that dumping, under-invoicing and smuggling not only caused approximately Rs10 billion loss to the national exchequer annually but it also affected the production of local industries.

According to the official, the tax authorities have received complaints from the private sector of under-invoicing of as many as 54 items.

The complaints were sent to the tax authorities for consideration by around 64 manufactures-cum-exporters, who were seeking necessary measures for countering the menace of under- invoicing.

They have asked for checking the value of under-invoiced goods in the country from where they originated.

The officials said that the measures would mostly include reduction of import duty on the raw materials of those items which were prone to smuggling, under-invoicing and dumping.

The budgetary committee have also been assigned the task to work out a list of those items prone to these practices with the assistance of relevant stakeholders.

The committee would also consider the proposal of reducing the input cost of production due to which the Pakistani products have become uncompetitive in the local and international markets.

With reduction in the input cost, the official said that it was estimated that the practice of smuggling, dumping and under- invoicing would reduce to a great extent.

According to an official report, at least 18 items of smuggling, cause a net loss of Rs262 million, annually. The items, which are being smuggled back into Pakistan include- kitchen ware; bicycles and spare parts; battery cell; pad-locks, tin ingot; cosmetics; desiccated coconut powder; bulb and tube lights; mixer; nitto tape; toiletries; tooth paste; food stuff processed; chewing gum; blanket, black tea, toys, black pepper; vacuum flask; sewing machine; baby pampers, shoe polish, tools, footwear; betel nut; tiles; lack dana (seed lac); almonds (bada- dry fruits); small cardamom, desiccated coconut; vehicle of all kinds (except for left hand driving); gas heaters, cigarettes paper/filter rods, sugar.

On the other hand, the major chunk of dinner sets, toys, cheap textiles, textile products, electric bulbs and tubes, sanitary fitting and crockery are imported from China, Thailand and other far eastern countries and there are reports of under- invoicing to avoid government taxes.

These products have flooded the local markets, which are causing the loss to the production of the local industries, said the officials.

To meet this deficiency the officials said that the government could impose countervailing duties on those items, which are dumped in the local market by resulting heavy under- invoicing but they said it would take a period of six months for even filing an application for the initiation of inquiry.

Due to this lengthy process, the industry have not that kind of resources to go for countervailing duties, said the officials.

A customs officials, "we follow GATT valuation code, which is importers friendly, it is basically the product of developed world, which is against the all trade barriers, which hampers normal flow of goods in the international markets. Developed world want to sell their products with minimum interference through customs barriers."

The GATT valuation code was drafted in the above perspective and has taken away the discretionary power of customs to suspect valuation of imported goods, added the official.