PESHAWAR, Aug 2: The NWFP government is not likely to review its decision regarding withdrawal of tobacco development cess on open market transactions in view of its commitments with the international donor agencies.

The government’s immovability in this regard contradicts the assurances that had recently been extended by provincial minister for excise and taxation Fazal-i-Rabbani to the protesting tobacco growers.

Sources said that the provincial government was not likely to revert its decision as the World Bank was already reluctant to release the second tranche of the loan amounting to $90 million for 2003-04.

“The NWFP finance department has made its position clear to the provincial minister for excise and taxation that the decision is irreversible because of the provincial government’s commitments with the international lending institutions,” a senior government official said.

The scope of the tobacco development cess had recently been extended through an act of the provincial assembly to the open market transactions in an attempt to improve the revenue base of the provincial government.

The development cess is estimated to generate an additional revenue of Rs50 million each year and constitutes one of the ‘revenue mobilisation’ steps outlined in provincial government’s agreement with the World Bank.

Previously, this development cess was levied on cigarette companies’ transactions with the tobacco growers through the Pakistan Tobacco Board at the rate of Rs1.5 per kilogramme.

The new arrangement extended the scope of the development cess besides raising its rate to Rs2 per kilogramme.

The move was necessitated because of the fact that the quota- based transactions covered only half of the production (tobacco) every year.

Considerably large quantity of tobacco is sold out by growers in the open market without the involvement of PTB.

The decision had caused an unrest among the tobacco growers, creating resentment against the Muttahida Majlis-i-Amal government in the NWFP.