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May 29, 2020

Sugar report

Newspost

 
May 29, 2020

The report has become a favourite subject of discussion on the media. Both sides, leaders from the opposition and government spokespersons, restrict their focus on the export of sugar and grant of subsidy by the incumbent government or the previous governments. Allowing export and subsidy may or may not have been a prudent decision but this is not the crux of the findings that can assail the cartel on both sides.

For the first time, it unravels how the cartel manipulates the market and its modus operandi. One, the price paid to farmers is much less than the officially set price. Two, sugar production by mill owners is hugely under-reported to evade taxes. Three, exports were made on paper and subsidy claimed. And four, the under-reported quantity was smuggled out and black money parked through money laundering. While operating in a clandestine manner, most of the dealings are in cash, double books of accounts are maintained – one for official purposes and the other being actual for management purposes – and financial audit is avoided. To reform the sector, it is proposed that cost and financial audit of sugar mills by a reputable firm of chartered accountants be made mandatory by the government and carried out every year to ensure transparency in the purchase price, determining authentic production volume, taxes due and paid, exports made and subsidy claimed, if any.

Arif Majeed

Karachi