KARACHI: Pakistan's Export Facilitation Scheme (EFS) is under scrutiny following concerns raised by the Pakistan Chemicals and Dyes Merchants Association (PCDMA) about its misuse, leading to significant revenue losses for the national exchequer. The association has highlighted that duty-free imports intended for export purposes are being diverted into the domestic market, adversely affecting compliant commercial trade.

According to Pakistan Chemicals and Dyes Merchants Association, PCDMA Chairman Salim Valimuhammad provided a detailed analysis, revealing that imports under the EFS, particularly those categorized under HS Codes 28-39, have reached approximately PKR 470 billion. This figure represents a 70 percent increase compared to commercial imports, which stand at PKR 275 billion. Valimuhammad emphasized that this imbalance indicates a possible leakage of EFS goods into the local market, contradicting the scheme's export-linked objectives.

The analysis presents notable discrepancies, such as in the case of polymers (HS Code 3901), where EFS imports were reported at PKR 72.9 billion, in contrast to commercial imports totaling PKR 38.7 billion. Valimuhammad estimates that the systemic misuse of the EFS has incurred a revenue loss ranging from PKR 115 to 140 billion.

In response to these findings, Valimuhammad has urged the government to conduct immediate post-clearance audits and enforce mandatory reconciliation of imports with actual exports. He also recommended the introduction of HS-code-wise caps based on exporters' track records and the integration of import, production, and export data through digital means to ensure transparency.

Without these measures, Valimuhammad warned, the EFS could become a loophole for tax-free domestic sales, leading to market distortions and harming legitimate trade activities.