Let­ters

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It is rel­e­vant to bring out a sta­tis­ti­cal pro­file of the in­dige­nous tobacco grower/in­dus­try of Khy­ber Pakhtunkhwa. Ac­cord­ing to the statis­tics pub­lished by Pak­istan Tobacco Board (PTB), area un­der tobacco growth is only .27% of the to­tal ir­ri­gated area of Pak­istan. While it is a source of in­come for about 1.2 mil­lion peo­ple, about only 75,000 farm­ers are in­volved in tobacco growth. Ac­cord­ing to the PTB re­port there are 50,000 labour force em­ployed in 21 dif­fer­ent fac­to­ries. While be­ing iden­ti­fied in the lower slab of FBR tax­a­tion regime, the tobacco tax re­turns were PKR 77 bil­lion in the fis­cal year of 2013-2014. How­ever, if there are in­stances of tax eva­sion it’s a re­flec­tion on the law en­force­ment agen­cies and not on the petty farmer or the small man­u­fac­tur­ers of th­ese prod­ucts.

As a re­sult of the for­eign multi­na­tion­als in the tobacco world the farm­ers are get­ting a very poor deal for their prod­uct. Ac­cord­ing to the statis­tics of the PTB, the world prices for FCV tobacco are in­di­cated be­low: The above re­veals that the best vin­tage tobacco grown in Pak­istan sadly gets the low­est price in the world. Is there any­one to ra­tio­nal­ize this pric­ing struc­ture as per world price, or will this un­fair so­lic­i­ta­tion, led by the MNCs, of the farm­ers of Pak­istan con­tinue to mis­ap­pro­pri­ate their well de­served hard earn­ing.

It is im­por­tant to point out that the large scale smug­gling of im­ported cig­a­rettes has now be­come com­mon place. The du­ties and taxes im­posed by the gov­ern­ment on im­ported cig­a­rettes are be­ing evaded through ma­nip­u­la­tion of records, and th­ese high quan­ti­ties of smug­gled cig­a­rettes are brought into Pak­istan to be sold with even higher prof­its mar­gins for the multi­na­tion­als. The smug­glers from Afghanistan and Iran are not alone in this deed but they in fact backed by for­eign owned ma­nip­u­la­tors present in tobacco in­dus­try. As re­ported in UK Times in Novem­ber 2014, re­cently one of th­ese groups has been fined for not com­ply­ing with Europe an­tis­mug­gling law.

Pak­istani gov­ern­ment au­thor­i­ties need to be more pru­dent with the mat­ter of th­ese in or­der to curb this il­licit trade and im­pose heavy du­ties and fines on the MNC whose prod­ucts are sold in the Pak­istani mar­kets through the um­brella of lo­cal rep­re­sen­ta­tives/ smug­glers. In con­clu­sion, one can safely say that the big play­ers of cig­a­rettes in­dus­try, who hold over 95% share of the cig­a­rette in­dus­try, need to pay more taxes rather than the nascent tobacco in­dus­try of Pak­istan, who are al­ready taxed to the hilt.

Ali Imam Islamabad

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