ISLAMABAD: Federal Board of Revenue (FBR) Chairman Shabbir Zaidi has informed the speaker national assembly that the finance bill clearly states that the effect of Federal Excise Duty (FED) should not be passed on to growers and the burden should be entirely borne by the cigarette manufacturers. It was also highlighted that the FED was intended for tracking and tracing of tobacco purchases in order to prevent tax evasion.
Speaker National Assembly Asad Qaiser stressed the need for protecting the interest of the tobacco farmers and ending their exploitation. He urged the FBR that the burden of tobacco taxation should not be passed on to growers and that the tobacco farmers should be provided maximum relief as they constitute the most vulnerable segment in the entire tobacco value chain. He was chairing a meeting at Parliament House to discuss the budget proposals for giving relief to the tobacco growers.
A working group on tobacco growers concerns constituted by the Speaker National Assembly and headed by the Parliamentary Secretary for Commerce Ms Shandana Gulzar Khan, briefed the panel about the concerns of tobacco growers with reference to the current tax regime. Ms Shandana Gulzar Khan underlined the need for striking a balance between revenue collections, health concerns and interests of the farmers.
Apprising the Members of the Special Committee on Agricultural Products, Members from tobacco growing districts, and provincial ministers, the panel maintained that the entire economy of tobacco growing districts revolve around single crop, tobacco, which serves as their sole source of livelihood. The Members remarked the FBR should not ignore the political economy and political dynamics of the tobacco growing regions.
Speaker Asad Qaiser highlighted that millions of households are affiliated with the tobacco value chain and emphatically stressed that the revenue authorities should pay heed to unintended effects of tobacco taxation on the growers.
The panel expressed reservations over the Federal Excise Duty on tobacco on the grounds that despite being an adjustable excise duty, it has negatively affected the farmers who are left with lesser avenues to sell their crop.
KP Provincial Minister for Sports, Tourism, Archaeology and Youth Affairs outlined that levying FED at GLT stage has precluded the tobacco dealers, middlemen and ‘manidwalas’ to effectively engage in tobacco trade and has shrunken the bargaining power of the farmers.
The FBR officials maintained that the local industry continues to evade taxes and cause a loss to the national exchequer. They remarked that the taxation regime never intended to press the tobacco farmers.
The Chairman FBR and State Minister for Revenue Hammad Azhar sought recommendations of the panel and assured that such recommendations pertaining to preventing the burden of taxation being passed to growers will be incorporated in the finance bill.
Speaker Asad Qaiser formed a taskforce to find viable solutions to protect the tobacco growers and present policy recommendations to the FBR by Tuesday, 18th June, 2019.
The meeting was attended by MNA Syed Fakhar Imam, MNA Usman Khan Tarakai, MNA Sher Akbar Khan, MNA Shandana Gulzar Khan, MNA Nafeesa Inyaat Ullah Khattak, MNA Mujahid Ali, Senator Dilawar Khan, Senator Shibli Faraz, MPA Meher Taj Roghani, KP Provincial Minister for Sports, Tourism, Archeology and Youth Affairs, Muhammad Khan Atif Khan, KP Minister for Local Government, Elections and Rural Development Shahram Khan Tarakai, Special Assistant to CM KP on Industries Abdul Karim Khan, Chairman FBR Shabbar Zaidi, State Minister for Revenue Hammad Azhar and officials of FBR.
