ISLAMABAD: Exemption for non-custom paid (NCP) cars in merged districts of erstwhile Federally Administered Tribal Areas (Fata) will end on June 30, 2023, Federal Board of Revenue Chairman Asim Ahmed informed the Public Accounts Committee (PAC) on Wednesday.

“The fate of such vehicles is yet to be decided by the government,” he said.

The issue came up after MNA Dr Nisar Ahmed Cheema expressed concern that more than 100,000 duty-free cars were on roads across the country, adding that these cars were being mostly used in crimes.

He said there were 121,192 NCP cars on the roads. “The government can generate approximately Rs38 billion if these vehicles are regularised under an amnesty scheme,” he pointed out.

FBR chief informs PAC about details of tax paid by cigarette producers

The official informed the forum that during the years between 2018 and 2022, the FBR seized 14,113 vehicles worth Rs36bn. After auctioning the non-tampered vehicles, the bureau generated Rs26bn, he added.

About tax collection from cigarette producers, the FBR chairman said Rs160bn had been collected under this head.

Three multinational cigarette producing companies had contributed 98 per cent, or Rs157bn, of this amount while local producers’ contribution was Rs3bn, or 2pc, he said.

All the PAC members suggested increasing tax on cigarettes to discourage the unhealthy practice.

The FBR chairman said that track and trace system was in place only in three multinational cigarette companies while local producers had obtained a stay order from the Islamabad High Court in July 2022 against the government’s monitoring mechanism.

“It is important to humiliate local producers who have obtained a stay order from court and refuse to pay taxes to the government,” PAC Chairman Noor Alam Khan said.

The eight producers who obtained the stay order are Souvenir, Universal, Royal, Asia, Sarhad, International, Paramount and Kingdom Tobacco, the meeting was told.

The committee noted that the government had been too lenient with multinational companies.

“Just like the government has given car assemblers 200pc relief, it has also given much tax relief to multinational cigarette producers,” Mr Khan observed. He said multinational companies should be charged heavier taxes to generate more income for the national exchequer.

Published in Dawn, October 20th, 2022