Tobacco growers welcome decision to abolish Rs300 tax on crop

Updated June 27, 2019

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“Higher taxes lead to exploitation of small farmers.” — Dawn/File
“Higher taxes lead to exploitation of small farmers.” — Dawn/File

ISLAMABAD: Growers on Wednesday lauded the government’s decision of abolishing Rs300 additional tax on tobacco crop and asked the government to impose higher taxation on the multinational companies that were making huge profits.

The speakers also asked the authorities to play their role for restoration of workers terminated by the multinational tobacco companies.

Addressing a press briefing here at the National Press Club, the representatives of labour federation, Pakistan Kisan Board (PKB) and Sarhad Agriculture and Rural Development Organisation (SARDO) said the local industry was paying 5pc tax per kilogram on purchase of tobacco.

President PKB KP, Rizwanullah said that elimination of Rs300 tax from cultivators will increase the sale of tobacco on handsome rate and it will improve the financial status of the growers.

“The purchasers will now pay around Rs8.89 per kg at the rate of 5pc tax to government before purchasing tobacco,” he said.

The Federal Board of Revenue (FBR) had imposed tax of Rs300 on the sale of tobacco, which the local farmers termed as granting indirect benefit to the multinational cigarette manufacturers.

The speakers said that tobacco was a cash crop in Khyber Pakhtunkhwa (KP) and higher taxes would only have a negative impact on 1.13 million small farmers and around 15,000 local and cottage industrial workers of the province.

“Higher taxes lead to exploitation of small farmers,” Rizwanullah said.

The speakers alleged the multinational tobacco companies provided loan for the raw material to growers on 36pc interest rate and compelled the farmers to sell their produce at less than market rates.

President SARDO Haji Abdul Nabi Mohmand said multinational tobacco companies lobbied for imposition of additional tax on growers, but themselves avoided paying taxes.

“Strict penalties should be imposed at multinational companies for tax evasion,” he said.

President Labour Federation KP Ibrarullah said that multinational tobacco companies have terminated hundreds of workers from their job without any reason and they should be restored.

Published in Dawn, June 27th, 2019