Illegally imported Iranian fruit upsets Pakistan apple cart

Vendors sell apples on a street in Quetta on July 26. (AFP)
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Updated 15 October 2020

Illegally imported Iranian fruit upsets Pakistan apple cart

  • Iranian apples brought in as Afghan imports to avoid taxes are undercutting native growers
  • Edible goods from Afghanistan are exempt from tax, while other countries have to pay a levy of 17 percent

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.

Related


Malaysian employers shocked, angry over fines ruling for overcrowded migrant workers’ lodgings

Updated 30 November 2020

Malaysian employers shocked, angry over fines ruling for overcrowded migrant workers’ lodgings

  • Businesses face penalties of more than $12,000 per worker for breaching new COVID-19-driven regulations

KUALA LUMPUR: Malaysian employers on Monday expressed their shock and anger over the government’s decision to impose a $12,277 fine for each foreign worker found to be living in overcrowded lodgings.

A number of company bosses said they were in a race against time to fall in line with the new criteria and avoid being hit with heavy penalties.

“Although many employers are rushing against time to fulfil the requirements, one of the main challenges industry players face is with the local councils,” Soh Thian Lai, president of the Federation of Malaysian Manufacturers (FMM), told Arab News.

He said local councils throughout the country were not prepared “to assist the industry with the required endorsements” to comply with the terms of the Employees’ Minimum Standards of Housing, Accommodations, and Amenities Act 446.

“This has led to the main reason for the delay (in providing more space for migrant workers),” he added.

The decision came as a surprise after the Human Resources Ministry (HRM) had set March 2021 as a deadline for all industries to comply with the act which requires employers to ensure that their workers had sufficient residential space.

Malaysian government minister, Ismail Sabri Yaakob, announced last week that the penalty would be imposed from Nov. 26, sending shockwaves through businesses.

Soh said to provide housing facilities for each worker, employers were being forced to create additional space.

“There is, however, a lack of suitable accommodation as there are limited hostels available. Converting shop-lots to dwelling space will take time and costs to renovate the space according to the specifications outlined in the regulations as well as meeting other requirements by local authorities,” he added.

Act 446 was fully implemented in September this year after the country’s parliament amended the previous jurisdiction which only covered housing aspects of more than 20 acres of the plantation and mining sector.

The new amendment, however, extends the rules to all employment sectors that provide housing for workers.

“Most companies are currently juggling their operations toward business recovery while trying their best to adhere to this legislative requirement to readjust the living quarters for their workers,” Malaysian Employers Federation (MEF) Executive Director Shamsuddin Bardan told Arab News.

Shamsuddin said that “the spike in (coronavirus disease) COVID-19 infections at a workplace involving foreign workers may have triggered the government” to call for the full compliance of Act 446 with immediate effect.

While the government “needs to contain the new infections” among foreign workers, it was also important to “assist employers,” he added.

“Many employers still depend on various government assistance, such as wage subsidies, to remain in business.

“It was only introduced on Aug. 30 and the government then decided to enforce the act in November, so the lead time given to employers to fully comply with the act was too short.

“It is costly to upgrade accommodations on the backdrop of a decreased cashflow from the COVID-19 pandemic,” Shamsuddin said.

Soh said Minister of Human Resources Saravanan Murugan had acknowledged some of the challenges involved and agreed, in principle, to a more educational approach for enforcement of the act.

“Following several taskforce meetings with the ministry to address compliance to labor laws by industry in recent months, it has been agreed that given these challenges, including the challenges faced due to the COVID-19 pandemic, industries would need some time to make the changes and improvements to the housing facilities,” he said.

The FMM said it had written to the government and reiterated a previous request “for a 12-month grace period, without the imposition of any immediate penalty.”

Meanwhile, Malaysian Rubber Glove Manufacturers Association (MARGMA) president, Supramaniam Shanmugam, told Arab News that 59 members of the association had expressed concerns over the “lack of time” to comply with all the requirements of Act 446.

“The Act 446 talks about the welfare of workers and one of the items to fulfil are the certificate of accommodation, which is done online, and our members have been advised to apply for it. So, what we are asking for is time,” he said.

MARGMA represents rubber glove manufacturers and employers, including leading industry players such as Top Glove and Supermax.

The HR minister and government labor department were both unavailable for comment.

The Malaysian director general of health, Noor Hisham Abdullah, recently called for employers to adhere to Act 446 “as a matter of public safety,” adding that “infections involving foreign workers needed to be addressed. The Ministry of Health urges employers to play a bigger role in tackling it.”

On Tuesday, Malaysia reported more than 1,200 new COVID-19 cases, adding to the national caseload of 65,697 infections.

According to the World Bank’s estimate, Malaysia houses at least 3 million foreign workers and is the sixth-largest migrant-receiving country in East Asia.

Indonesian workers make up to 39 percent of the total migrant workers population, followed by Nepal and Bangladesh at 24 and 14 percent, respectively, according to a report published in August by the Southeast Asia office of the Heinrich Boll Stiftung foundation.

Foreign workers in Malaysia are restricted to low-to-medium skilled industries such as construction, services, plantation, agriculture, manufacturing, and domestic work.