$8b discrepancy unearthed in exports, imports.

KARACHI -- Pakistani traders have allegedly been found involved in discrepancies of over $8 billion through under-invoicing of imports and exports of goods to four major trading partners, causing significant foreign exchange losses, tax revenue losses and supporting financial transactions via the illegal Hawala-Hundi network.

In letters to Finance Minister Shamshad Akhtar, the Pakistan Business Council (PBC) - a business advocacy platform having big foreign and local business groups as members - revealed that Pakistani traders reported imports from China, Singapore, Germany and the United Kingdom at $18.88 billion in calendar year 2022.

However, it said, the four trading partners reported exports of $26.30 billion to Pakistan in the same year, showing a disparity of $7.51 billion.

Similarly, the business advocacy platform found traders involved in under-invoicing of $594 million in exports to China in 2022, which constituted around 21% of the total exports made to the neighbouring and world's second-largest economy.

Talking to The Express Tribune, PBC CEO Ehsan Malik said the disparity of $594 million in exports to China simply meant that Pakistan did not receive the due amount of foreign exchange.

It came at a time when the country's foreign exchange reserves were under pressure due to high demand for imports and foreign debt repayment.

Read Massive under-invoicing scam unearthed in imports

PBC said on X, formerly Twitter, that export values exceeded import values by $7.50 billion.

'At duty rates from 10% to 30%, and together with GST (general sales tax) at the rate of 18% and withholding tax of 6%, we estimate a revenue loss of between Rs579 billion and Rs964 billion at the average exchange rate for 2022,' PBC said.

'It is time for the government to explore how to avoid revenue loss through transparency.'

One way is to secure the exchange of trade information, ideally in real time, through electronic data interchange (EDI) with major trading partners. Then levy duties on the export values received from exporting countries.

The Gulf Cooperation Council (GCC), with which Pakistan has just signed a trade agreement, does not...