Business community alarmed by alleged Cigarette tax violations

Islamabad: The concern about playing with rules and regulations for business and trade allegedly by cigarette companies has been rising with each passing day. 

The business community has sounded alarm as law-abiding companies have been bearing the brunt for those who earn favors through undue means. 

Joining the cause, the president of the Rawalpindi Chamber of Commerce and Industries Saqib Rafique said that the government should plug the gaps in tax collection so that no one is allowed to mould laws in their favor. He said that loopholes in tax collection amount to giving undue favours to a curtail or an individual.

 As a result, law-abiding traders and industrialists have to bear burden in the shape of excessive taxes. Such practices run contrary to the principles of promotion of business and trade, he said, adding that the government should look into the matter. He was commending on media reports about alleged violation of Federal Excise Act 2005 by cigarette manufacturers.

To drive the point home, Centre for Research and Dialogue (CRD) has urged the finance minister for action against multinational cigarette companies allegedly involved in flagrant violation of the country’s tax laws.

The development comes at a time when the government is struggling to broaden the tax net and plug the loopholes in the tax machinery. 

In its letter, the CRD letter pointed out violations of the Federal Excise Act 2005 after the multinational cigarette companies introduced new variants of the same brand family at significantly lower prices. 

According to the rules, no manufacturer or importer of cigarettes can introduce or sell a new variant of a cigarette brand at a price lower than the lowest actual price within the same brand family.

In a press release, the CRD stated that despite this regulation, the Pakistan Tobacco Company (PTC) has allegedly launched a new brand, Capstan International, priced at Rs 164, substantially lower than its existing family brand, Capstan by Pall Mall, which is priced at Rs 212.

“The flagrant violations by multinational cigarette companies not only breach tax regulations but also jeopardize public health by making the cigarette more affordable,” said Amjad Qamar, Director CRD. 

Qamar has also writted a letter to the finance minister in this respect. In his letter, Qamar has urged swift and decisive action to address this issue and uphold the integrity of tax laws aimed at safeguarding public health and ensuring fair market practices.