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Panah seeks tobacco taxation data on FBR website

Updated November 23, 2018

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The Pakistan National Heart Association (Panah) urged a Senate committee to direct the Federal Board of Revenue (FBR) to upload data on tobacco taxation on its website every month. — AFP/File photo
The Pakistan National Heart Association (Panah) urged a Senate committee to direct the Federal Board of Revenue (FBR) to upload data on tobacco taxation on its website every month. — AFP/File photo

ISLAMABAD: The Pakistan National Heart Association (Panah) urged a Senate committee to direct the Federal Board of Revenue (FBR) to upload data on tobacco taxation on its website every month.

In a letter written last week, it has also suggested the imposition of price reduction restrictions so that tobacco companies would not be able to reduce price to avoid tax.

The Special Committee of Senate to Review the Decline of Revenue on Cigarettes, chaired by PML-N Senator Kalsoom Parveen was established during the tenure of the previous government.

It is mandated to look into the decline of Rs33 billion in tax collection from the tobacco industry.

Senators Sherry Rehman, Mushahid Hussain Syed, Azam Khan Swati, Mohammad Ali Khan Saif, Maulana Abdul Ghafoor Haideri and Chaudhry Tanvir Khan are members.

The committee has been looking into the matter after the introduction of the third tier duty in May 2017 led two tobacco companies to reduce the prices of their most-sold brands to move them from the second to third tier of tax and avoided Rs33 billion in taxes in a year.

Because of the step, the federal excise duty got reduced by 50pc, which increased the sale of tobacco but cut the government revenue.

During the last meeting on Nov 6, the committee directed Panah, a health concern which has been making efforts to ban smoking, to give its recommendations so that tobacco companies will not avoid tax in the future.

In a letter, Panah President retired Maj Gen Masudur Rehman Kiani has recommended that FBR be instructed to upload data related to cigarette sales and related taxes collected on its website every month.

The letter also suggested that the committee may recommend that government decrease the threshold price of second tier tax and impose price reduction restriction as an immediate step.

“This will counter the move made by multinational cigarette manufacturing companies to avoid actual taxes,” Mr Kiani said.

Panah representative Malik Imran told Dawn that it was heartening to see that the committee has been working on the issue and that prominent senators have been attending the meetings regularly.

“Tobacco companies have avoided Rs60 billion worth of taxes the last two years so we suggest efforts be made to recover the taxes evaded in the past. Steps should also be taken to increase the price of cigarettes in order to save the young generation from the hazards of tobacco,” he said.

He said his organisation also suggests bringing the cigarette brands which were in the second tier but dropped to the third back to the second tier again.

Mr Imran said the next meeting will be held in the last week of November.

“Bureaucrats cannot put up resistance to the influential tobacco industry and we are confident parliamentarians will take the issue to a logical conclusion,” he said.

Published in Dawn, November 23rd, 2018

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