ISLAMABAD: As a result of strenuous efforts by the Federal Board of Revenue (FBR), illegal trade of tobacco has been reduced and legal trade has captured the market, raising revenues collections in the form of duties and taxes. In March this year, the FBR had directed IR Enforcement Network to expand the scope of regional enforcement hubs to check illegal tobacco and cigarette trade in the country. The Regional Enforcement hubs were also established in Multan and Bhawalpur etc to intensify the drive against the illegal trade of tobacco and cigarettes.
In this regard, Tanvir Akhtar, Chief Commissioner Inland Revenue Regional Tax Office (RTO) Rawalpindi, who was also central co-ordinator of IR Enforcement Network on illicit tobacco/cigarette trade, gave detailed briefing on performance of “IR Enforcement Network” at FBR House.
According to Chairman FBR Tariq Mahmood Pasha, the broad role in the enforcement network included identifying core stakeholders of the sector, conducting discrete market surveys, providing legal advice to the field formations, compatible tax analysis, plugging existing loopholes, co-ordination and highlighting raids and seizure in the media.
While briefing the Senate Standing Committee on Finance and Revenue, Tariq Mahmood Pasha said that the IR Enforcement Network engaged in the development of strategy to combat illegal cigarette trade in Pakistan, especially to address foreign non-duty paid/counterfeit brands, locally manufactured non-tax paid cigarettes, dumping by AJK cigarette manufacturers, cigarette manufacturing in non-taxable territories i.e. FATA/PATA, tracking Alternate/mobile cigarette manufacturing facilities, monitoring of dormant cigarette manufacturing units, pooling of IR resources (human and physical) for joint enforcement initiatives and highlight details of raids and seizures in the national print and electronic media through co-ordination with FATE wing, FBR.
Chairman FBR further briefed the committee regarding change of Sales tax rates on petroleum without the approval of the Cabinet in July, 2017. He mentioned that ex-post facto approval had been taken from the Cabinet because at that particular time, the Cabinet stood dissolved.
Senator Saleem Manviwalla demanded clarification on how the sales tax was changed. Chairman FBR replied that a formula was incorporated and orders were not made in FBR but it was a policy decision taken in higher echelons. However, now in the new policy, the Cabinet approval was not mandated.
Senator Osman Saifullah Khan showed concern whether increase in revenue was due to increased tobacco consumption. Upon this point, Chairman FBR ensured that there had been significant increase in enforcement of policies which led to better revenue output.
Senator Kamil Ali Agha raised concern over an unprecedented issue of misuse of authority by customs officials as reported by a news channel. He apprized the Chairman FBR to initiate investigation into the matter to determine its validity and authenticity. The Chairman FBR agreed to comply and report back in the next meeting.
Senator SaleemMandviwalla inquired whether rules had been made under Benami Act, 2017, to which the Chairman FBR responded with positive input that Ministry of Law and Justice had vetted the rules and a summary had been prepared for approval in next Cabinet meeting.
Senator Kamil Ali Agha wanted to postpone the issue of providing subsidy to the sugar mill owners on the account that the manufacturers of sugar failed to compensate the sugar growers. The State Bank responded that due instructions had been given to the banks on the issue of extension of maturity period for repayments of overdrafts by Sugar Mill Industry.
