A question has been raised whether the Ministry of Health is proposing revision in the punishments against persons involved in illicit trade of cigarettes as compared to heavy fine and imprisonment under the Customs Act 1969 and Federal Excise Act 2005.
Sources referring to a letter of the ministry said that the health ministry has recommended modification of punishments for illicit trade of cigarettes as compared to punishments specified in the federal tax laws i.e. Customs Act 1969 and excise laws.
Apparently, the punishments proposed by the health ministry seem to be not in line with the punishments specified in the Customs Act 1969 and Federal Excise Act 2005.
According to the new recommended punishments, all kinds of illicit cigarettes' manufacturers, distributors, retailers, and transporters would either be fined up to Rs 100,000 or imprisoned for maximum two years or both.
Sources reveal that the PM Office had sent a letter to the federal secretary, Ministry of National Health services, Regulations and Coordination and the chairman of the Federal Board of Revenue on 19th September, ordering them to commence a countrywide crackdown against illicit cigarettes.
Both the departments were asked to submit a monthly report entailing progress in this context. Surprisingly, the officials of the Health Ministry replied to the letter with an intention to amend the existing laws against the trading of illicit cigarettes and the new recommended law will allow either fining the convicts up to Rs 100,000 or imprisoning them for a maximum of two years or both the punishments can be given collectively.
This has been mentioned in the ministry's letter (action against sale of illicit cigarettes) addressed to the PM Office.
According to sources, the public treasury has to bear an annual loss of Rs 35 billion to Rs 40 billion due to illicit trade of cigarettes and the PM had shown his concerns over this issue and has ordered a countrywide operation against the mafia.
According to the Federal Board of Revenue, under the Federal Excise Act of 2005 (chapter 3 section 19 clause B), the manufacturing of fake cigarettes can lead to a fine of Rs 100,000 or 5 years of imprisonment or both the punishments can be executed jointly. Whereas under the Customs Act of 1969 (chapter 17 clause 156), punishment for smuggled cigarettes can either be a fine 10 times the total cost of confiscated cigarettes, or 14 years of imprisonment or both. The Federal Board of Revenue has stated that it is baffled by this new recommendation proposing to lower the punishments already prescribed.
According to the officials, if any such move has been made by the health ministry, it seems to be in direct clash with the PM's directive to take strict actions against this illegal trading.
Officials from the Federal Board of Revenue were committed that they will oppose any such law as it will only benefit those who are involved in this illicit trading of cigarettes.
It is not clear why the said ministry has proposed low punishments for illicit trade of cigarettes as compared to punishments under the Customs Act and excise laws.
Copyright Business Recorder, 2019
Comments
Comments are closed.