Rs112 billion to be collected form tobacco sector during current financial year: Senate     

ISLAMABAD: Senate Special Committee on Causes of Decline in Tax Collection of Tobacco Sector, here on Tuesday was apprised by the Federal Board of Revenue (FBR) that an amount of Rs. 112 billion revenue earning was expected from the tobacco sector during current financial year as revenue collection from the tobacco sector was on the declining trend from last three years.

The committee met here with Senator Kalsoom Parveen in the chair was also informed that the FBR had introduced several corrective measures to check the smuggling which was providing dent to national exchequer in tune of billions per annum.

Member Inland Revenue FBR Dr Hameed Atique Sarwar told the committee that different tax jurisdiction in the country was a big hurdle in tax enforcement and revenue collection in the country and encouraging the illicit trade of different items and discouraging the legal trade.

He proposed the committee that tax incentives must be given to promote the industrialization in under developed areas of the country which would help to create new job opportunities for skilled and sami-skilled labor force, adding that there must be one tax jurisdiction to overcome the enforcement issues.

He further told the committee that mechanism was put on place to overcome the illegal movement of tobacco which was damaging the local cigarettes industry, commercial exporters, multinational companies and growers, adding that it was also working streamlining the different tax tires on tobacco and green leaf tobacco.

The member FBR said that two multinational companies including Philip Morris and Pakistan Tobacco Company was the main contributor in revenue collection where as it was expected that Rs. 12 billion to be collected form the local cigarettes manufacturers.

He told the committee that local tobacco production during last year was recorded at 70 million kg, out of the total produces about 45 million kg was purchased by the two multinationals, about 10 million kg were exported, adding that 15 million was disappeared from the market, which were smuggled.

Speaking on the occasion, Senator Mushahid Hussain Syed said that tax losses of Rs. 31 billion and disappearance of 15 million kg of tobacco was showing the weakness in the enforcement system of the FBR and asked the board to strengthen its enforcement.

Senator Dilawar Khan asked for preparing policies that would create win win situations for all the stakeholders and promote the exports to fetch the foreign exchange reserves.

Senators, Mushahid Hussain Syed, Dilawar Khan, Azam Khan Swati and Dr Ashok Kumar attended the meeting, besides senior officials of FBR were also present in the meeting.