Tax stamps on cigarettes: Govt asked to hire local printing house

Nearly 19.5b illegal cigarettes were consumed in Pakistan in 2014

LAHORE: Discussing the country’s tobacco trade, communication expert Aniq Zafar has praised the Federal Board of Revenue’s initiative to introduce tax stamps on cigarette packs.

“This move is likely to tighten the noose around the unabated untaxed cigarette trade, additionally, it will also help increase revenues of the government by promoting a legitimate tobacco sector,” he said.

However, hiring a foreign firm to print tax stamps on cigarette packs and ignoring the local printing houses, which are able to undertake the task, will prove detrimental to the national economy.

Zafar expressed these views during an interactive workshop on Tuesday on the existing scenario in tobacco trade in Pakistan.

“The government should not allow the money spent on tax stamps to be handed over to some foreign company. In the presence of Security Printing Press, Printing Corporation of Pakistan and a host of other big printing houses, there should not be any need to rely on a foreign company,” he remarked.



Additionally, Zafar pointed out, the price difference between legal and tax-evaded cigarettes was a major challenge the government was facing that undermined its public health objectives one of which was to curtail cigarette consumption across Pakistan.

“The formulation of effective policies and practical steps at the government level coupled with social awareness and coordination among stakeholders is essential to curb a mushroom growth in illicit cigarette trade in the country.”

Nielsen Pakistan Senior Manager Jawwad Riaz said one in every four cigarettes in the country was illegal. “In Pakistan, nearly 19.5 billion illegal cigarettes were consumed in 2014, of which 17.3 billion or 89% were local non-duty paid. More than two billion cigarettes are smuggled into the country and added to the illicit trade each year.”

He added, “Overall, 23.7% of the cigarettes annually sold in Pakistan are illicit. In addition to billions in revenue loss to the government, local non-duty paid cigarettes undermine the public health.”

According to the Nielsen report “The Challenge of Illicit Trade in Cigarettes: Impacts and Solutions for Pakistan”, the national exchequer suffers a loss of Rs24 billion annually due to this practice.

Published in The Express Tribune, July 20^th, 2016.

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