ISLAMABAD: Anti-tobacco activists have alleged that the contract for a system to track and trace cigarettes and ensure that tobacco companies are paying their taxes has been awarded to a front for the tobacco industry.

They have also alleged that the rules for the award were amended to facilitate the company, which has no experience using a track and trace system for manufactured goods.

However, the Federal Board of Revenue (FBR) has claimed that it is almost impossible to find a company that has never worked for the tobacco industry. It also said Public Procurement Regulatory Authority (PPRA) rules were followed in the award.

Under the Federal Board of Revenue’s (FBR) track and trace policy, the company has been contracted to stamp each pack of cigarettes. The stamps will be identifiable and verifiable and taxes will be imposed on the basis and number of stamps, because of which the tobacco industry will not be able to evade them.

Malik Imran, a representative for the Campaign for Tobacco-Free Kids, said the FBR announced the contract for the system was awarded on Oct 30.

“However, we have documentary proof that the company is front company of the tobacco industry because it receives funding from an international tobacco company. The company will ultimately facilitate the tobacco industry in avoiding taxes. We are sure it will use the same stamps for cigarette packets that will be sent to different regions,” he claimed.

The FBR’s decision will cause a significant financial loss, Pakistan National Heart Association General Secretary Sanaullah Ghumman said.

He explained that one feature of the contract was that any person will be able to check a cigarette pack to see if taxes on it were paid.

“That feature was removed because the company that has won the contract was not capable of providing the facility. The only company, which has an international reputation and was capable of providing the application, was removed on technical grounds,” he said.

“If tax evasion is allowed the price of cigarettes will decrease and ultimately it will become affordable for the youth, which is the tobacco industry’s major target,” Mr Ghumman said.

FBR spokesperson Dr Hamid Ateeq said it was true that the company that won the contract for the system had worked for an international tobacco company. He said the tobacco company in question only has a 5pc to 10pc share in Pakistan.

“Moreover, it is very difficult to find a company that has never worked for the tobacco industry as the industry also hires them to ensure their products are not stolen,” he said.

He said 16 companies received documents for the award of the contract and 11 participated in the process.

“The company that has won the contract met the PPRA rules and it is a well-reputed company. I believe that some big fish in the tobacco industry are not in favour of the track and trace system, as we have tried to introduce the system six times but every time controversies were created,” he claimed.

Published in Dawn, November 6th, 2019