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ISLAMABAD: Tobacco farmers admitted that the advance income tax of Rs390 per kilogram on tobacco is not applicable to the growers but it would hurt local cigarette manufacturing companies, who pay a good price for the locally-procured tobacco.

Addressing a joint press conference here on Tuesday at the National Press Club, Liaquat Yusufzai, Tobacco Growers Association of Pakistan, Rizwan Ullah, President Kissan Board Pakistan, President Mehnatkash Labour Federation, Ibrar Ullah, and farmers’ associations pleaded to withdraw the said tax to favour the small tobacco manufacturers.

Supporting the local manufacturers of cigarettes, they endorsed that we fully support the national cigarette manufacturing companies.

The Federal Board of Revenue (FBR) has been requested to convene a meeting with the growers and farmers to hear their viewpoint on the said advance income tax of Rs390 per kilogram, they pleaded.

When asked why the local producers are protecting the interest of the local cigarette manufacturers, they responded that the national companies pay a better price of unmanufactured tobacco as compared to the multinational cigarette manufacturers.

Even if the tax is adjustable, the small companies are not well documented to claim such an adjustment and keep track of all transactions. On the other hand, the big companies are fully documented and they can easily claim the tax adjustment.

“We have called this Jirga at the federal capital to place our demands before the government,” Rizwan Ullah stated.

He said that the tax would end the competition between the local companies and big entities companies and small companies would be out of business. There would be a monopoly of only big companies after the implementation of this tax.

The said advance tax should be imposed at the stage of import or sale of manufactured cigarettes.

“We only want that there should be a level playing field for all companies in the country. Instead of limited buyers, there must be a number of buyers of the same product,” he added.

He said the advance tax on the tobacco leaf was hurting the sale of the crop in the market and this would render over 15,000 labourers and 20,000 families of the farmers jobless.

Rizwan Ullah also rejected the imposition of the advance tax on the crop, saying the government was destroying ripe crop of the farmers through such tactics instead of providing them relief.

Liaqat Yousafzai of Kashtkar Coordination Council Khyber-Pakhtunkhwa termed the imposition of the advance tax on the tobacco crop as “public enmity.”

He said that rates of tobacco were increasing the world over while they were decreasing in Pakistan. The farmers in Swabi, Mardan, Charsadda, Buner, and Mansehra grow the tobacco crop and they have urged the government to facilitate them by withdrawing the advance tax on it.

Other speakers on the occasion said that the government should facilitate the farmers in sowing and harvesting of the crop as this was contributing billions of rupees in taxes annually.

Naimat Shah Roghani, President of Farmers’ Rights Protection Organisation, said that imposition of the advance tax on the tobacco crop was a result of a nexus between government officials and multinational tobacco companies.

He said the tax was aimed at eliminating the local tobacco industry and buys the crop from the farmers on cheaper rates.

All tobacco farmers of the KP province have warned the government of protests outside the FBR office in Islamabad and to block the motorways if it failed to withdraw the advance tax of Rs390 per kilogram.

Copyright Business Recorder, 2022

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Muhammad Kashif Sep 30, 2022 05:41pm
If the government surrenders before the farmers the whole process of documentation of the tobacco sector will crash. The government should provide a level playing field for all players of the tobacco sector. Actually farmers are lobbying to protect the vested interests of the local manufacturers from documentation to avoid taxes.
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