KARACHI: Tobacco industry has urged the government to amend sales tax and federal excise laws making evasion as a criminal offence.
In its budget proposals for 2017-18, the industry said that the level of illicit trade in tobacco in Pakistan is currently measured highest in its history at approximately 40 percent of the total consumption, which is translating into a revenue loss for the government of approximately Rs40 billion.
The tobacco industry proposed the Federal Board of Revenue (FBR) to introduce a monitoring system through tax stamps printed by the Pakistan Security Printing Corporation or a similar internationally experienced entity selected through a transparent process.
Moreover, stricter criminal penalties to be introduced under the Federal Excise and Sales Tax Act and rules for non-compliance.
To support the legal industry revival, via actively taking enforcement action against illicit players as well as further amending the excise laws to make excise and sales tax evasion a criminal offence.
The industry proposal on tax stamps and enforcement measures will arrest the exponential growth of illicit trade in Pakistan. The government can plug the revenue leak and reverse the future loss of government tobacco revenue from the tobacco industry.
