KARACHI: The Pakistan Chemicals & Dyes Merchants Association (PCDMA) has urged the implementation of a robust monitoring system to curb potential misuse and diversion of dyes and chemicals imported under the Export Facilitation Scheme (EFS). In a letter to Federal Board of Revenue Chairman Rashid Mehmood Langrial, PCDMA Chairman Salim Valimuhammad recommended the establishment of a digital tracking and reconciliation mechanism to ensure that the imported materials serve their intended purpose.

According to Pakistan Chemicals and Dyes Merchants Association, there is heightened concern regarding textile dyes and chemicals, particularly reactive dyes imported under PCT 3204.1600. The association highlighted a discrepancy between rising imports under EFS and static export levels, prompting calls for increased scrutiny. PCDMA emphasized its support for government initiatives aimed at export growth but underscored the need for effective oversight to prevent abuse of the facilities.

Salim Valimuhammad outlined that manufacturing textile products involves three cost stages: raw materials, processing, and value addition. He noted that processing could constitute 8-10% of the total cost, with dyes and chemicals accounting for 25-30% of processing expenses. These estimates vary according to product specifications. The association, representing local merchants in dyes and chemicals, raised concerns that increased EFS imports, without a corresponding rise in exports, might lead to the diversion of materials into the domestic market, including undocumented sales, impacting legitimate businesses.

PCDMA proposed a digital system linking EFS imports with production, inventory, and export data to reconcile quantities with actual utilization. It also recommended reasonable consumption norms and risk-based audits to address discrepancies. The association suggested starting with reactive dyes under PCT 3204.1600 as a pilot project and extended its findings to other chemicals. PCDMA remained committed to supporting export growth while ensuring that EFS benefits reach intended recipients and protect government revenue.