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.

Islamabad: The joint session of Parliament has started in which President Asif Zardari is addressing the meeting.

Members of the Senate and the National Assembly have reached the Parliament Hall. Prime Minister Shehbaz Sharif, Asifa Bhutto Zardari, Bilawal Bhutto Zardari are also present in the House.

Apart from this, the ambassadors of different countries are also present in the galleries while Pakistan Tehreek-e-Insaf (PTI) members are sitting in the hall carrying posters of PTI founder Imran Khan.

During the speech of President Asif Zardari, protest and noise is being made by the opposition.

Islamabad: The government’s decision to raise the Federal Excise Duty (FED) on cigarettes has yielded a notable increase in revenue while simultaneously contributing to a reduction in cigarette consumption.

The Federal Board of Revenue (FBR) Yearbook 2022-23 substantiated the noteworthy development, according to which the share of cigarettes in the overall Federal Excise Duty (FED) collection has escalated to 40 percent. 

The report said that the share of the top ten sectors is about 94 percent and cigarette stood at top of the list followed by cement with 18.7 percent and concentrates 9.6 percent share.

This upswing is chiefly attributed to the imposition of higher FED rates on cigarettes. The fiscal year 2022-23 saw three significant upward revisions, ending a three-year stagnation period.

“One of the major sectors which contributed to FED revenues included cigarettes due to both inflation and increase in excise duty rates,” the FBR Yearbook said.  

As cigarette consumption diminishes, the consequential reduction in health-related issues could result in a positive impact on healthcare expenditures, contributing to a healthier and more sustainable society.

The decrease in tobacco usage also aligns with the broader public health objective. 

A study by the Pakistan Institute of Development Economics (PIDE) brings attention to the significant economic impact of the use of tobacco, according to which costs linked to diseases and deaths resulting from smoking in 2019 reached a staggering Rs 615.07 billion ($3.85 billion), equivalent to 1.6 percent of the GDP. 

Commenting on the development, Malik Imran Ahmed, Country Director, Campaign for Tobacco Free Kids (CTFK) said that the tobacco industry had expressed discontent over the increase of FED claiming it would result in the shutdown. 

However, the FBR’s data has challenged the industry’s assertion showing a significant 40 percent share of the FED. 

Independent experts have emphatically called upon the FBR to implement World Bank’s recommendation advising increase in FED on cigarettes, in a recent report Pakistan Development Update (PDU). 

“A substantial revenue gain of 0.4 percent of GDP could be achieved if the current rate on premium cigarettes (PKR 16.50 per cigarette) was also applied to standard cigarettes,” the report said.

The guidelines of the WHO Framework Convention on Tobacco Control (FCTC) also emphasize the pivotal role of taxation as a primary tool in mitigating tobacco consumption.