PESHAWAR: The growers have opposed massive cut to the advance tax on tobacco insisting the government’s move will encourage the black marketing of the cash crop and harm economy.
They demanded immediate withdrawal of the decision to prevent their ‘economic murder’.
The government has announced the reverting of the Rs300 per kg advance Federal Excise Duty on tobacco imposed to check the illegal tobacco trade to Rs10 per kg.
Addressing a news conference at the Peshawar Press Club on Thursday, local tobacco farmer Abdul Qayyum said massive cut to the advance tax on tobacco would promote the illicit tobacco trade and hurt poor growers.
Accompanied by farmers Ali Ahmad and Gulzar Khan, he criticised the government for yielding to tax evaders. He said the tobacco sector could earn huge revenue through the Rs300 advance tax.
Abdul Qayyum said some growers claimed that the collection of advance tax on tobacco was exploitation and the demand for tobacco would decrease due to the imposition of the adjustable excise duty.
He said the Pakistan Tobacco Board Ordinance, 1968, protected tobacco growers and made it binding for tobacco manufacturing companies to purchase additional tobacco yield from growers.
Ali Ahmad said the farmers’ associations were being used to pressure the government for withdrawing steps meant to curtail illegal trade to help the growth of tobacco crop.
He said growers were being exploited by the local illegal cigarette manufactures since the levy not only forced them to pay the adjustable tax on processed leaf but also provided the FBR with leaf purchase data for all manufacturers.
“This tax is advance and adjustable and is applicable to manufacturers and does not hurt farmers at all, whereas local illegal cigarette manufacturers continue to misguide farmers of KP for own benefits,” he said.
The grower said the commerce ministry had fixed the minimum indicative price of tobacco every year after proper consultation with the representatives of tobacco growers.
Another farmer, Gulzar Ahmad, said local companies avoided tobacco purchase in the open market just to evade tax and that they also pestered farmers by delaying payments and rejecting tobacco on the pretext of low-quality leaves.
He said the local companies met their demand by using backdoors for purchases and not providing loans, fertilisers and other facilities to farmers, while noted taxpaying companies supported growers.
Published in Dawn, June 28th, 2019