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BR Research

On the rocks, FBR!

Published June 10, 2011 Updated June 10, 2011 12:00am

The only difference between the Muslim League and PPP is that politicians from the former mix whiskey with cola, while those from the latter use it with soda or water, but both drink whiskey; noted an American diplomat while commenting on Pakistans political landscape.
At a meeting of the Senates Standing Committee on Finance this week, an FBR official estimated that Pakistan can generate Rs70 billion per year in excise duty revenues, if sales of alcohol are legalised and taxed.
Despite his own affinity with fine wine, alcohol and gambling were banned in the country in 1977 by ZA Bhutto, in the face of mounting pressure from religious groups that had contested the elections under the banner of the Pakistan National Alliance with the slogan of establishing Nizam-e-Mustafa in the country. But did that prohibition stop people from drinking or betting at the race courses? The answer is a rather big and obvious, No!
Prohibition laws have never been implemented in spirit; so those who are fond of the bottle have gone on pouring wine like water while the government has lost out on revenues that could have been generated from these sales.
Just as drinking is bad for health and has social and moral consequences, smoking falls in the same bracket. But why doesn the government ban the sale of cigarettes? It doesn - because these sales contribute a hefty amount to the national exchequer in the form of excise duty. Philip Morris and Pakistan Tobacco contributed about Rs61 billion to the exchequer, last year.
Locally manufactured alcohol is sold at licensed shops all across Karachi; supposedly to non-Muslims with permits. But if that were true, the countrys religious minorities must be grossly under-represented in Parliament, judging by the throngs outside liquor stores.
While the authorities look the other way (or are too busy gulping down their share); revenues of Murree Brewery have rocketed by five times in the past seven years alone.
Yes, living in a bi-polar society, where the conservatives seem to be the major lot, no one can dare to legalise alcohol or gambling; but there are ways around this predicament. Malaysia, which is also a Muslim-dominated country, has a ban on alcohol consumption and sale to Muslims, but it taxes alcohol at the same time.
By contrast in Pakistan, there is a selective ban on the consumption of locally produced alcohol while imported (read: smuggled) liquor remains the life of the party for those who can dole out the cash.
Had you ever been those get-togethers hosted by members of the establishment, politicians, the business elite, or media moguls, you would likely have been offered enough Black Label and Absolut Vodka to turn a truck driver into a poet.
The solution lies in taxing imported liquor for consumption by non-Muslims, similar to the provision for local brews, and similar to what is practiced in Malaysia. Those, whose throats are parched, will continue their binge through underground bootleggers, while the more virtuous will remain as indifferent as they are now. The only beneficiary is going to be the cash-starved state, by collecting much needed tax revenues under this domain.
On Wednesday, while addressing the National Assembly, seasoned PML (N) politician Ayaz Amir demanded the abolishment of the prohibition on alcohol. Dozens of parliamentarians who are usually snoozing during proceedings, reportedly sat up in their seats on the mention of such a relevant topic.
But Amirs rallying cry will probably not garner much support in the parliament, although it may bring good tidings for non-Muslims in the country. In other words, the chain-smoking FBR chairman will not be popping open any champagne to celebrate enhanced revenues on this account, any time soon.

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