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Misappropriations of Export Development Surcharge

Misappropriations of Export Development Surcharge



The Minister of Commerce

Government of Pakistan




Export Development Surcharge of 0.25% of FOB Value is being collected from the exporters by the negotiating banks on behalf of the Government of Pakistan as per SRO No 10 (I) 2003 dated 04-01-2003. The funds collected from the exporters are meant to be used in Export Promotion Schemes, for example opening of retail outlets and exporters offices abroad, freight subsidy for live seafood, etc. But

But from 04-01-2003 onwards a major portion of the fund is being misappropriated by the Export Promotion Bureau/Trade Development Authority of Pakistan, senior officials of Commerce & Trade Group, District Management Group and others.

As per press reports appearing in Dawn dated 20-09-2013. “Prime Minister Nawaz Sharif had directed the FIA on August 6 to collect evidence and initiate criminal proceedings against officials, exporters and companies allegedly involved in the scam involving ‘misappropriation’ of Rs 1.27 billion.”

The Ministry of Commerce has constituted a committee to investigate disbursements made under the export promotion schemes in 2011, and 2012. The Finance Division released Rs 1 billion in 2011, and 2 billion in 2012 for these schemes.

It is proposed that the inquiry should start from the date of issuance of SRO No 10(I) 2003 dated Jan 04, 2003 till today. The total amount misappropriated may be ascertained and recovered from the concerned officials and refunded to the exporters proportionately from w whose account EDS has been deducted by the Banks against exports.

It is requested that SRO No 10(I) 2003 dated January 4, may be rescinded and Export Development Surcharge may be withdrawn, as the funds are being misappropriated. EDS unnecessarily adds to the cost of exports.


Yours Sincerely,

M S Lodhia