IB report shows mafias bleeding Pak economy

ISLAMABAD: A detailed report by the Intelligence Bureau on smuggling, tax evasion, drug trade, illegal currency business and misuse of Afghan transit trade shows how different mafias are hugely haemorrhaging the country’s economy.

The report submitted to the government by the IB also highlights what the agency is doing to check the economic terrorism threatening Pakistan.

According to the report, just the illegal supply of Iranian POL products alone causes an annual loss of at least Rs225 billion to the national exchequer. Smuggled Iranian oil is usually sold at illegal roadside petrol outlets but has now even found its way to regular petrol pumps across the country.

Exhaustive anti-smuggling efforts by IB, says the report, resulted in the identification of 76 transporters and 29 smugglers and facilitators who were involved in the smuggling of Iranian oil. per the report, 995 illegal and unlicensed petrol pumps across the country were also identified for being involved in the sale and purchase of smuggled Iranian oil.

On the issue of the massive devaluation of the Pak rupee, the report says that the volatility in the stock market and imposition of capital gain taxes in real estate and capital markets resulted in investors with black money diverting their capital towards foreign currencies so as to capitalize on the weak economic fundamental-induced exchange rate devaluation.

Additionally, Afghanistan’s annual trade volume gap of $4 billion is met through the drug trade, currency smuggling from Pakistan to Afghanistan, and receipts on account of hawala/hundi. In order to thwart currency smugglers and forex market manipulators, the IB identified 122 currency smugglers and 40 exchange companies involved in manipulation of the currency markets.

With drug use on the rise, and some drug dealers even having made their way into educational institutions in urban centers besides amassing dirty money by selling their product in the international market, the IB has identified 717 drug dealers across Pakistan and 22 transnational drugs networks operating across various countries of the Middle East and Europe. This includes a notorious Nigerian group operating in Islamabad.

With around Rs240 billion in annual tax evasion, tobacco is among the top five most tax-evading sectors in Pakistan’s ailing economy. The imposition of heavy taxes on Tier-I and Tier-II cigarettes in March 2023 led to an increase in smuggling. Taking note of the matter, the IB launched operations against those involved in this illegal activity. The agency identified 62 cigarette smugglers, traced routes used for tobacco smuggling, and unearthed 40 godowns used for storage of illicit cigarettes. This included three big illegal manufacturing units of counterfeit cigarettes and recovery of 1.03 million kg non-duty paid tobacco in a single operation from an undeclared godown located in district Swabi, KP and involving Rs2.645 billion evasion of FED.

According to the report, the bulk of tea imported under the Afghan Transit Trade Agreement (ATTA) is smuggled back through reverse cargo into Pakistan. The IB has shared details of 63 major tea smugglers and 29 storage sites of smuggled tea with the concerned authorities.

The report reveals that 49 per cent of the annual demand of tyres in Pakistan is met through smuggling which not only adversely affects the local manufacturing industry but also causes a colossal loss to national exchequer. While working against those involved in tyre smuggling, the agency has shared information about 66 tyre smugglers and 71 godowns where smuggled tyres were stored with the concerned authorities.

Regarding wheat and sugar, the report says that, despite being eighth largest wheat producer and sixth largest sugar producer in the world, Pakistan is confronted with multidimensional food security because of the hoarding and smuggling of essential food commodities such as sugar, wheat and urea / fertilizer.

The IB has claimed that it monitored the entire supply chain of wheat, and mapped out stakeholders and their nefarious role in disruption of supply chain. During 2023, a total of 9237 operations were carried out against wheat hoarding / smuggling by district administration/ LEAs on IB pointation, which resulted in the recovery of 641,427 MT wheat valuing Rs73 billion. The IB has also identified and shared with relevant departments the details of 57 wheat hoarders, 21 smugglers and 534 flour mills involved in misappropriation of the wheat quota.

On the issue of sugar hoarding and its smuggling to Afghanistan by mafias, the report says that during 2023, around 476 operations were carried out against sugar hoarding/ smuggling by district administration/ LEAs based on IB leads which resulted in the recovery of 93,182 MT sugar valuing Rs13 billion. Further, 109 sugar smugglers and 14 sugar mills involved in sugar smuggling were also identified by the IB.

The agency launched action against fertilizer hoarding while also taking immediate measures to stop its smuggling to Afghanistan. During 2023, the IB assisted district administrations and LEAs in crackdowns across the country against fertilizer hoarders and smugglers wherein overall 312 operations were carried out against fertilizer hoarding/ smuggling which resulted in the recovery of 47,222 MT fertilizer valuing Rs2.6 billion. Further, the IB has identified and shared the details of 666 fertilizer hoarders and 132 fertilizer smugglers with relevant authorities.