Tyre industry alone suffering billions of rupees in losses because of smuggling
A key shortcoming of the present government, like most of its predecessors, has been its inability to restructure the country’s tax system. This is made worse by how the government has failed to cope with rampant under-invoicing and smuggling due to which Pakistan continues to lose millions of dollars every year.
One of the areas where massive under-invoicing and smuggling is ongoing right under the nose of Federal Board of Revenue (FBR) is the tyre sector. The sector is heavily dependent on imports, making it a lucrative opportunity for smugglers.
Pakistan does not encourage its manufacturing sector enough which is why renowned international tyre manufacturers do not invest here. In presence of current tyre smuggling and under-invoicing, no new tyre company have invested in Pakistan.
Local Production
The country does not have any company that produces truck or bus tyres at the capacity that is needed, while it has only one manufacturer that produces passenger car tyres – General Tyre and Rubber Company (GTR).
GTR meets 23% of the total tyre demand in the country, while according to industry estimates, the country imports 40% of the tyres from different countries. The remaining 37% of the market share is in the hands of tyre smugglers who mainly use Chaman and Landi Kotal routes to bring in used and refurbished tyres into Pakistan.
The market believes the situation will remain the same unless the government starts taking serious measures to control such practices. In the presence of widespread smuggling, new investors will never come to Pakistan and the country will continue to depend on tyre imports.