Members of a parliamentary panel opposed a proposal having backing of multinational tobacco companies to increase tax on tobacco from existing Rs 10 per kg to Rs 500 per kg.
The proposal was put before the National Assembly sub-committee of special committee on agricultural products headed by convener Shandana Gulzar Khan where it faced severe criticism. According to the Federal Board of Revenue (FBR) representatives who briefed the committee, the proposal was floated by multinational tobacco companies.
Malik Ihsan Ullah Tiwana, member of the committee, opposed the proposal and said, “Imposition of such heavy taxes will overburden the farmers (of tobacco).”
Last year, the proposal to impose Rs 300 advance tax per kilogram on tobacco had triggered protests and demonstrations by the farmers and industrial workers. The farmers have already conveyed their concerns and told the government of Pakistan Tehreek-e-Insaaf (PTI) that they would not accept any such move.
“The committee should end the nexus between tobacco companies and the FBR,” said economic expert Ikramul Haq, adding that the FBR has been unable to monitor 10 companies who are processing tobacco leaves and that strict action should be taken against all those who are not paying taxes under the existing laws.
Highlighting the issues related to tobacco industry, he said that carbon and sugar taxes are imposed all across the world but the Ministry of Law and Justice has rejected the proposal by declaring it a provincial subject. “Two big tobacco companies are involved in illicit tobacco trade and are not allowing authorities to enforce track and trace system,” he said, adding that the FBR has imposed 5% advance tax on tobacco but it is not being collected.
However, representatives from Pakistan Tobacco Board informed the committee that entire record regarding tax collection is available with them. In response, the FBR said that they lack resources for monitoring of the tobacco industry.
Tobacco farmers and industrial workers have also written a letter to National Assembly Speaker against the proposal. The letter maintains that multinational companies are trying their best that the government enhances advance tax on tobacco which will annihilate the local industry and help establish their monopoly. The farmers said they fear exploitation at the hands of the multinational companies once their monopoly is established.
