KARACHI, Dec 1: The heaviest load of excise duty on alcoholic drinks is in Sindh as compared to Balochistan and Punjab. It is the main cause for proliferation of illicit breweries in the province.
Apart from illicit breweries that are a permanent threat to human lives, the major cities and towns of Sindh have become dumping places of smuggled alcoholic drinks. This deprives the provincial exchequer of the revenue that it should have got
"The rates difference in various levies is creating leakages, in the shape of bootlegging and smuggling'' a report on Sindh's tax administration, prepared by the Applied Economics Research Centre (AERC) of Karachi University, asserts.
A comparison of different levies on trade of alcoholic drinks in the three provinces shows that it is more than 300 per cent higher in Sindh and more than 150 per cent in Punjab.
A wholesale trader and importer has to pay annual licence fee of Rs500,000 in Sindh and Punjab. It is only Rs100,000 in Balochistan. A retail trader or a storekeeper has to pay Rs300,000 annually in Sindh to get his licence renewed. An alcoholic retailer in Balochistan pays Rs100,000 and only Rs75,000 in Punjab.
The difference in rates of various excise levies is much more pronounced and sharp when it comes to actual import and selling of the drinks. The excise authorities in Sindh charge Rs250 assessment fee on one quart bottle as compared to Rs70 in Balochistan and Rs170 in Punjab.
On a 500 ML beer bottle, the Sindh government charges Rs28 as against Rs17.50 in Punjab and only Rs10 in Balochistan. Besides this, the Sindh authorities charge Rs5 vend fee on a liquor bottle and Rs2 on a bottle of beer.
The rate of excise duty on Pakistan made foreign liquor is Rs760 per proof gallon or Rs95 per bottle in Sindh. It is only Rs200 per proof gallon in or Rs25 per bottle in Balochistan and Rs300 per proof gallon or Rs37.50 per bottle in Punjab. The Sindh levies Rs10 excise on a liter of beer as against Rs4 in Punjab.
The AERC report observes that low rates of excise in Balochistan have given incentive for liquor smuggling in Sindh, thus affecting the revenue collection. Therefore, it recommends to harmonize the permit fee, excise and other rates with Balochistan and Punjab.
