Abstract

This paper reviews the prevalent issue of the smuggling and the usage of the non-custom paid

vehicles in Pakistan while exploring its brutal effects on the economy and the society of the

country. The inflation rate has increased to an alarming level in Pakistan, which has led people to

find the easy route towards a leading a luxurious life on a budget. Thus, the NCP vehicles are

smuggled through Pakistan’s borders with Iran and Afghanistan to the Chaman city, which is the

hub of such activities. The facility to buy inexpensive vehicles has paved the way for the easy

execution of the illegitimate plans of militant groups and criminals, which badly affects the

society. It also affects the foreign investment as well as the cash flow in the country. Besides, a

lack of tax revenues is directly related to an increase in crimes; also, it results in the lack of

resource allocation for public service by the government. It is hoped that the government add this

issue in its priority list and take appropriate measures and formulates effective policies

accordingly.

Literature Review

Immense pieces of literature have been devoted to the usage of NCP vehicles worldwide,

nonetheless, Bacha (2015) and Kamran (2016) specifically shed light on this issue with the

backdrop of Pakistani socio-political arena. An increase in the usage of NCP vehicles especially

in the under-developed areas of Pakistan, i.e. Baluchistan, FATA and KPK, has given rise to

criminal activities as well as the illegitimate acts by the militant groups (Bacha 2015). Even the

government officials are unable to control the situation, as many influential political and

religious leaders have indulged themselves in these activities. Pakistanis, having a desire to live a

luxurious life, buy expensive cars at affordable prices while neglecting the severe consequences

(Kamran 2016). Bacha (2015) merely illuminates the causes and effects of the usage of NCP cars
on the society, without putting forth any viable measures or suggestions to minimize the extent

of this issue, whereas Kamran (2016) depicts a solution-based argument by discussing a bunch of

appropriate steps that the government can take to reduce the immensity of the drawbacks of the

issue. Moreover, Wajid (2014) describes the potential reasons behind the need to smuggle and

trade NCP vehicles. Those reasons are inclusive of tax burden, unemployment, inflation and lack

of law and order (Wajid 2014). All in all, the previous studies have not depicted the causes,

effects and solutions (collectively) for the usage of NCR vehicles in Pakistan; moreover, they

have not delineated the interconnection of the economic and the socio-political arena with the

undertones of smuggling of NCR vehicles in Pakistan specifically. Furthermore, the present

study takes the social, political and economic effects of NCR vehicles as well as depict the role

of the officials, belonging to the customs department and police, in reducing the rapidly

increasing trade of NCR vehicles.

Socio-economic effects of using non-custom paid vehicles in Pakistan

The metamorphosis of the world from industrialism to informationalism since the start of

the 21st century, has allowed the questionable practices of various kinds of corruption in many

countries; Pakistan being one of them. While many kinds of fraudulent conducts continue to

prevail in the country, smuggling of vehicles has paved the path for a plethora of negative effects

ranging from social issues to the economic ones. In the olden days, the automobile industry was

flourishing as many companies had established their branches in Pakistan; as the inflation rate

was negligible. Nonetheless, nowadays the inflation rate has increased to an alarming level,

which has led people towards finding the easy route towards a leading a luxurious life on a

budget. Hence, Pakistanis – even those living in the progressive urban areas – being influenced
by a capitalistic mode of life, are tending to buy non-custom paid vehicles in affordable prices to

fulfill the luxurious living standard. Whereas, people belonging to the not-so-progressive areas of

the country and the ones working for the co-opting elites, use such vehicles to be indulged in

illegitimate activities, i.e. terrorism and other crimes like human trafficking, kidnapping, etc.

Non-custom paid vehicles are mostly smuggled through the borders with Afghanistan and

Iran, Chaman being the hub of NCP vehicles. In an interview with a NCP cars dealer, it was

found out that there is a handsome demand for such cars in Baluchistan. Additionally, one must

not ignore the fact that Baluchistan is the most under-developed province in the country. NCP

vehicles are also delivered to the other provinces, especially to the elite. Pakistan has a 959 km

long border with Iran and a 26000 km long border with Afghanistan. The cars are smuggled

through the mountains, as it is not possible to patrol across the border. Custom officials are

present on authorized routes, however the smugglers use various routes through the border. The

smugglers are usually locals, therefore they are accustomed to the area and know all the

shortcuts.

Baluchistan, FATA and Khyber Pakhtunkhwa are home to terrorist activities as well as

militant groups. Furthermore, the facility to buy inexpensive vehicles has paved the way for the

easy execution of their illegitimate plans. Besides, the availability of the NCP cars has born a

hand to the local criminals to commit perfect crimes, as they successfully prevent themselves to

be identified while committing several crimes, such as kidnapping, human trafficking, serial

killing and robberies. Thereby, an increase in the crime rate affect the Pakistani society badly.

Moreover, it promotes lack of law and order; and the law is somewhat subordinated, thus it

ultimately gives way to the rule of the jungle, throwing democracy out of the window.
 Besides, it is a well-known fact that corruption breeds corruption. Henceforth, smuggling

has given rise to other crimes, as discussed earlier. A poor practice of law and order in the

country has indirectly influenced people to take the easy road towards tax evasion. Thus, the

supremacy of law is undermined. Furthermore, the elite/influential people or political or religious

leaders use NCP cars freely, without any hesitation as they have connections with senior

officials. In an interview with a police official, it was known that there is only one rule regarding

the usage of NCP cars and that is “might is right”. The official raised a viable question that how

come he can check a motorcade/rally of a religious group or a political party on the city roads. If

he or does so, unfortunately he would have to face severe consequences – for doing his job. Such

discrepancies in the treatment of people based on their position on the ladder of social hierarchy

breed political unrest and civil disobedience in the society and leave dangerous marks on the

psyche of the youth of the country.

Other than that, Pakistan’s economy has been brutally affected due to this smuggling of

NCP vehicles. According to the research, inflation is one of the major reasons behind the usage

of the NCP vehicles. Pakistan is a Third World country and is economically challenged due to a

burden of foreign loans upon its shoulders. Thus, the CPI rises in the country – which implies the

change in the prices of goods as well as services – causing a fall in the purchasing power of the

money. Henceforth, people become poor. Furthermore, the inflation results in a decrease in the

demand of goods as well as services and a decrease in the quantity of the real GDP of economy.

Tariff burden is also a leading reason behind it. Wajid says that the most popular and significant

cause of the shadow economic activities, as found in literature, is the tax rate. Due to high trade

restrictions, traders often find illegal ways of trading i.e. smuggling and miss-invoicing (2014).
 There are many forms of tax evasions, smuggling of NCP vehicles is one of them. Tax

evasions depresses the economy, as it decreases the amount of public services provided by the

government due to a lack of revenue. It ultimately results in raised taxes since the government

has to make up for the economic deficit of billions of rupees – thus, this adds more to the already

increasing inflation. Additionally, the government have to spend a huge sum of revenues to

prevent tax evasion. Smuggling of NCP cars in Pakistan has also hurt the domestic economy,

since the local businesses pay all the tax, but can’t flourish as the smugglers bypass the taxing

process. Moreover, it affects the foreign investment as well as cash flow in the country. Besides,

lack of tax revenues is directly related to an increase in crimes.

An increase in NCP vehicles has paved the way for extra rush of unauthorized vehicles

on the roads resulting in an increase in the petroleum usage and damage of roads; furthermore,

the government lacks revenues for the repair and reconstruction of the trodden roads. Several pot

holes can be seen on Malakand-Dir road – which is the nursery of the smuggling of NCP

vehicles (Bacha 2015). In several districts of Malakand Division, people are using NCP cars

freely as it is a tax-free zone. The custom duty officials have been provide with vehicles

verification system (VVS) to detect a NCP vehicle, but working against the elite is difficult for

them. Bacha reports that an official of the excise and taxation department said “At least 10 per

cent non-custom paid vehicles are on roads in different districts, but the users are so influential

that they could not be apprehended so easily. They are government officials, businessmen and

politicians,” he revealed. “We have to face humiliation and even life threats at the hands of

influential people while taking action against illegal vehicles, but our inspectors are not given

any incentive for the recovery,” the official complained (Bacha 2015). IGP Nasir Khan Durrani

has given a briefing the Federal Bureau of Revenue and chief secretary of KPK about the usage
of NCP vehicles by militant groups in 2014, but all in vain. Thus, the association of the

concerned departments with the illegitimate trade of NCP vehicles is of little to no use – their

hands are bound by some corrupt senior officials.

According to various surveys, Pakistanis who buy NCP vehicles are well-aware of the

consequences of their actions, still they continue to indulge in such acts. There are a bunch of

viable measures that can be taken by the government of Pakistan to decrease the smuggling of

NCP cars; such as the establishment of a central database to record the information regarding the

vehicles used by the citizens; enforcement of strict border laws; empowerment of the police

officials; decrease the customs duty to prevent the long-term economic deficit; improvement of

the quality of goods by the local manufacturers; and introducing schemes like the ‘Amnesty

scheme’ of 2012 that allowed the SUV owners to legalize their cars. About 90,000 cars were

legalized due to that scheme (Kamran 2016).

All in all, the trade as well as the usage of non-custom paid vehicles in Pakistan leaves

brutal marks on its economy, society especially the social well-being of the youth. It is hoped

that the government add this issue in its priority list and take appropriate measures accordingly to

minimize the long-term losses in economy, increase in crime rates, political instability, lack of

law and order, lack of empowerment of the officials belonging to the customs department and

police, and tax burden on the citizens.

 Works Cited

Bacha, Ali Hazrat. “Use of Non-Custom Paid Vehicles in Crimes Growing”. Dawn, 2015, URL:

www.dawn.com/news/1175392

Kamran, Mishal. “NCP Vehicles”. Dawn, 2016, URL: www.dawn.com/news/1298269

“How Does Smuggling Affect The Economy?” DBT & Partners Solicitors & Advocates, URL:

www.dpp-businesstax.com/legal-articles/smuggling-affect-economy/

Wajid, Zainab. “Smuggling around the World: An Empirical Investigation of Causes and

Indicators”. Forman Journal of Economic Studies, Vol. 10, 2014 (January–December) pp. 105-

133, URL: www.fccollege.edu.pk/wp-content/uploads/2017/03/Paper-5Smuggling-Around-the-

World-An-Empirical-Investigation-of-Causes-and-Indicators-by-Zainab-Wajid-Babar-Aziz-and-

Zahid-Iqbal.pdf