Industry urges government to stop sale of illicit cigarettes
Illicit trade costs exchequer Rs40-50b annually
Illicit trade costs exchequer Rs40-50b annually. PHOTO: FILE
LAHORE:
The legitimate tobacco industry in Pakistan has urged the government to curb the sale of illicit cigarettes through early introduction of the fiscal marking system.
Rather than repeatedly going through failed Request for Proposals (RFPs), it said, the government should introduce models which could provide a level playing field for all taxpayers and give illicit cigarette manufacturers a tough time.
“For almost a decade, we have been hearing the Federal Board of Revenue (FBR)’s claim that illicit cigarettes cost the national exchequer around Rs40-50 billion annually,” the stakeholders said. “However, majority of these illicit cigarettes, which have around 35% market share, are produced in Khyber-Pakhtunkhwa and Azad Kashmir. If these illicit operators are known, what is stopping the government from taking action,” they asked.
The new government recently made amendments that were incorporated into the supplementary budget in order to control the sale of illicit cigarettes. In an interview, the finance minister stated that the government was considering introducing a track and trace system to limit the supply of illicit cigarettes.
The stakeholders pointed out that it was not for the first time such a technology was being considered, adding the primary reason for all the previous failed attempts was that the RFPs were flawed and anti-competitive.
Taxes to be increased on cigarettes, cell phones
“A number of specifications in the most recent RFP were in violation of the PPRA Rule 10 as they favoured a single vendor, thus making the RFP anti-competitive. The Competition Commission of Pakistan, in its policy note to the FBR dated March 9, 2018, highlighted these concerns which led the FBR to make amendments in the RFP in mid-2018,” they said.
Published in The Express Tribune, November 1st, 2018.
The legitimate tobacco industry in Pakistan has urged the government to curb the sale of illicit cigarettes through early introduction of the fiscal marking system.
Rather than repeatedly going through failed Request for Proposals (RFPs), it said, the government should introduce models which could provide a level playing field for all taxpayers and give illicit cigarette manufacturers a tough time.
“For almost a decade, we have been hearing the Federal Board of Revenue (FBR)’s claim that illicit cigarettes cost the national exchequer around Rs40-50 billion annually,” the stakeholders said. “However, majority of these illicit cigarettes, which have around 35% market share, are produced in Khyber-Pakhtunkhwa and Azad Kashmir. If these illicit operators are known, what is stopping the government from taking action,” they asked.
The new government recently made amendments that were incorporated into the supplementary budget in order to control the sale of illicit cigarettes. In an interview, the finance minister stated that the government was considering introducing a track and trace system to limit the supply of illicit cigarettes.
The stakeholders pointed out that it was not for the first time such a technology was being considered, adding the primary reason for all the previous failed attempts was that the RFPs were flawed and anti-competitive.
Taxes to be increased on cigarettes, cell phones
“A number of specifications in the most recent RFP were in violation of the PPRA Rule 10 as they favoured a single vendor, thus making the RFP anti-competitive. The Competition Commission of Pakistan, in its policy note to the FBR dated March 9, 2018, highlighted these concerns which led the FBR to make amendments in the RFP in mid-2018,” they said.
Published in The Express Tribune, November 1st, 2018.