ISLAMABAD: Increase in sales of locally-produced, and tax-evaded, cigarettes has caused the government around Rs40 billion losses in taxes from the cigarette industry.
According to recent figures available with this scribe and documents handed over by the government at the announcement of Budget 2017-18, Pakistan has been struggling with the rise of tax-evaded cigarettes in the country.
“The tax collecting agency- Federal Board of Revenue (FBR) – has felt the drop in revenue as the amount has gone down by Rs40 billion. The original tax target was set at Rs111 billion,” FBR officials said.
According to the proposed budget, the government, while taking note of the decrease, has set a minimum price of Rs48 per cigarette packet.
“Coupled with enforcement, this will deter local tax evaders from selling cigarettes for as low as Rs15 per pack. Local tax evaders often write the accurate retail prices on the packs, after calculating excise and sales taxes, but sell the packs well below the minimum cost of Rs43, and even lower than the recently announced minimum price of Rs48 per pack,” officials said.
For this purpose, officials said that the government has chalked out a plan to create awareness programmes, informing and educating retailers and people that it is against the law to sell any packet for less than Rs48.
