Imposition of advance tax on tobacco leaf: PM urged to take notice of FBR's proposal

ISLAMABAD: Islamabad: tobacco farmers and industrial workers of Khyber Pakhtunkhwa Tuesday appealed Prime Minister Imran Khan to take notice of the Federal Board of Revenue's (FBR) proposal for imposition of advance tax of Rs 500 per kg on tobacco leaf in upcoming budget 2020-21.

They protested against the proposal of imposing advance tax of Rs 500 on tobacco leaf and demanded the government to tax cigarette pack instead.

"Remove additional tax on tobacco leaf and put tax on cigarette pack," representatives of farmers and industrial workers appealed to the PM after meeting.

"The new tax will bring end to the livelihood of hundreds of thousands of families directly dependent upon the tobacco sector," they said.

The meeting discussed the issue in detail and also demanded the government to take action against tobacco companies who have suspended thousands of workers.

Senior representatives of Kissan Board Pakistan, Sarhad Agricultural and Rural Development Organization, Pakistan Tobacco Growers Association, Anjuman Tahaffuz Huqooq Kashtkaraan, Kashtkaar Coordination Council, Mehnat Kash Labor Federation and Dealers Association alongwith hundreds of workers attended the meeting where they protested against the move.

The proposal of advance tax, according to the FBR, was floated by companies to which the representatives of farmers said these companies were influencing government's decision through lobbying.

Explaining the issue, they said that the lobby of tobacco companies was pushing the government for this measure to tax tobacco leaf after which local buyer of tobacco would lose the strength to purchase from the farmer. Consequently, only these companies would enjoy full authority of the tobacco leaf and can easily exploit tobacco farmers according to their very own will, they said.

These companies would then look towards international markets in a bid to fulfill the local demand of cigarette market which will directly affect national economy and tax collections in return, they said.

Tobacco is the only cash crop of KP through which government earns billion of rupees in terms of taxes every year. Imposition of any such tax would badly affect this sector as hundreds of thousands of workers associated with this sector would go jobless and the thousands of families dependent upon them would face the impact.

The farmers said that these companies were forcefully selling the wood used in processing tobacco leaf at the rate of Rs 700 instead of Rs 500. Moreover various fertilizers and pesticide were being sold to us forcibly.

The proposed move of higher advance tax would badly impact government revenue from the tobacco sector as there would be no growers while local industry would be annihilated and workers would go jobless.

At the same time, the tobacco exports have already gone down as well as the government revenues.

Recalling last year's intervention against advance tax of Rs 300, they requested Speaker National Assembly Asad Qaiser to once again play his role against imposition of advance tax and save thousands of jobs and the local industry.