Commercial importers have urged the federal government to remove the wide tax gap between commercial and industrial imports, arguing that the current structure is damaging fair competition and encouraging undocumented trade practices. Industry representatives said the tax differential on raw material imports currently ranges between 26% and 28%, making it increasingly difficult for genuine commercial importers to survive in the formal market.
Importers claimed that many goods were being imported under the names of industrial units and later sold openly in domestic markets to avoid higher commercial import taxes. As a result, they warned that the practice was depriving the government of billions of rupees in potential tax revenue while weakening transparency within the country’s documented economy and supply chain.
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According to industry representatives, businesses have increasingly started relying on informal arrangements to manage the heavy tax burden and remain competitive against goods entering through industrial channels. They explained that some importers were reportedly paying unofficial premiums equal to nearly 25% to 30% of the tax difference in order to maintain market access and pricing balance.
The importers further argued that commercial traders mainly bring in raw materials and intermediate goods required by manufacturing industries rather than importing finished consumer products for direct retail sale. Moreover, they stressed that many small and medium-sized industries depend heavily on commercial importers because they cannot independently import large quantities of raw materials due to financial and logistical limitations.
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Federation of Pakistan Chambers of Commerce and Industry has also raised the issue in its budget recommendations submitted to the government, supporting the demand for eliminating the tax differential. Importers proposed either complete removal of the gap between industrial and commercial imports or reducing the difference to a manageable level of around 2% to 3%.
Industry representatives said rationalising the tax structure could encourage more documented imports, reduce informal business activities and strengthen the formal economy through improved tax compliance and transparent trade practices. They also claimed that Pakistan’s commercial import volume could potentially double if the government introduced reforms aimed at bringing undocumented market activity into the official economic system.