The federal government is exploring the option of setting the Minimum Export Price (MEP) for all goods exported from the country, in collaboration with the relevant trade bodies.
Sources informed ProPakistani that the Directorate General of Intelligence and Investigation Customs Karachi has communicated in writing to the Director Headquarters I&I Customs Islamabad regarding the comprehensive implementation of the Minimum Export Price (MEP).
The Directorate of Customs Intelligence and Investigation Karachi received significant reports of under-invoicing in exports from its sister intelligence agency. Consequently, the mentioned issue underwent thorough examination.
It was discovered that the mechanism for establishing the Minimum Export Price (MEP), below which goods cannot be exported from Pakistan, is currently applicable to only 8 categories of items.
The exports of items subject to the Minimum Export Price (MEP) regime account for only 13 percent of the country’s total exports. This suggests that the minimum export price framework is not formally established for items that contribute to 87 percent of the country’s exports.
Upon further analysis of the country’s exports, it was revealed that there was no direct correlation between the volume of exports in terms of net weight and the foreign exchange remitted through these exports.
Details indicate that in the fiscal year 2020-21, $26 billion in foreign exchange was remitted against 23 million Net Weight in Tons (NWT). Similarly, in 2021-22, $34 billion in foreign exchange was remitted against 97 million NWT.
In the fiscal year 2022-23, $30 billion was remitted against 66 million Net Weight in Tons (NWT), and in the initial three months of 2023-24, $8 billion was remitted against 38 million tons.
Sources have indicated the necessity for a valuation ruling encompassing all export items. This measure aims to guarantee equitable and consistent valuation of goods, thereby preventing under-invoicing.
He approximated that this measure has the potential to augment the country’s export receipts by at least $500 million.
In light of the above, it is suggested that the Directorate General of Valuation (Customs) be urged to contemplate the establishment of the Minimum Export Price (MEP) for all exported goods in consultation with the relevant trade bodies. This step could prove effective in addressing under-invoicing in exports and is anticipated to significantly boost the foreign exchange earnings from exports.
