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MEP may stop under-invoicing in rice exports

ISLAMABAD: Under-invoicing in rice exports caused a loss of Rs1 billion to the national kitty every year until the federal government imposed the Minimum Export Price (MEP) to regulate the export regime of the commodity, The News has learnt.

“The rice exporters in collusion with government officials evaded taxes and caused a loss of billions of rupees to the exchequer, but with the imposition of MEP, the practice will come to an end,” said a leading exporter and representative of the REAP.

The rice exporters have sub-offices in Dubai to re-export the commodity to main destinations in Europe and other countries with fake names and companies, but actually, they kept a major portion of the foreign exchange deposited abroad, bringing less money and ultimately causing a loss of billions of rupees in the form of taxes, the exporter added.

Pakistan exports nearly three million tonnes of rice and its exports hovered around the $1 billion mark for the past several years.

The under-invoicing issue arose during a lengthy meeting of the secretaries’ committee with the representatives of REAP who discussed the imposition of a ban on the export of rice, to stabilise its prices and availability in the local market. REAP proposed the imposition of MEP as well, to keep the menace in check. However, the commerce ministry was against the move saying that any intervention would affect the trade, an official who was part of these negotiations told The News.

A commerce ministry official refuses to acknowledge the under-invoicing in rice export, as it did not deal directly with the invoicing of exports. The issue would be better known to either State Bank of Pakistan (SBP) or the Custom departments of FBR.

Regarding the disadvantages of under-invoicing, another rice exporter said that it would not only hamper the export figures but also cause hindrances for the exporters in grabbing a permanent share in the rice markets.

He further hoped that the imposition of MEP would out the Indian rice exporters, as the exports for India would now be impossible. With the imposition of the MEP, Pakistan rice export will cross the two billion dollar mark by the end of this fiscal year.

[muslim]

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