Tobacco

Since 2017, FBR’s Inland Revenue Enforcement Network has been making continuous raids and has seized

1.63 billion non-duty-paid cigarettes and raw tobacco [1]

FBR should focus on bringing the non-tax paying manufacturers into the tax net. This will help the government to recover the lost government revenues of more than PKR 77 billion annually [2] and encourage foreign investment.

Additionally, continued enforcement through Inland Revenue Enforcement Network (IREN) against illegal cigarette manufacturers throughout the supply chain from leaf buying to retail is vital to ensure control over illegal cigarette manufacturers.

Excessive taxation on the legal cigarette packs leads to an increasing price gap between legal and non-compliant illegal cigarette packs (as they violate the Federal Excise Act 2005 and sell their illegal cigarette packs well below the minimum price of Rs. 62.75 [3] set by the government.

Cigarette Consumption and Excise Duty [1]



References