Published Date: May 30, 2021
Cigarette output figures being fudged to evade tax: SDPI
SDPI study titled “Regional Tobacco Tax Regime and Its Implications for Health” released on Saturday has said that the tobacco lobby in the country was powerful due to its connections in the power corridors that it has been demanding tax relaxations what they said to counter illicit trade.
The study found that the excise duty imposed on cigarettes in Pakistan remained the lowest as compared to other countries of the world, resulting in enormous increase in cigarettes consumption and revenue loss.
The SDPI study suspects that tobacco companies fudge cigarette figures to evade tax, it said, adding that while the consumption figures stand at a whopping 86.6 billion cigarettes per year, the official figures by the industry remain restricted to 55 billion only.
The SDPI said the rest was usually blamed on illicit trade, but the volume of illegal trade is not more than 9pc which is way less than the tall figure of 41pc being reported by companies.
The ruling elite should also keep distance from the tobacco industry, the study suggested, adding that it is very important because the industry would use it as a vehicle of their influence and interest.
The study suggested that a uniform tax system needs to be enforced at all levels so as to control tax evasion, urging the government to abolish the tier system that was providing tax evasion opportunities to tobacco companies. The single tiered system would help not only strengthen the revenue generation mechanism, but also the problem of illicit trade could be dealt with effectively.
In Pakistan, there are 22 million tobacco users, which includes 60pc adolescents and as a result 1.5 million cases of oral cancer are reported by Pakistan Medical Association on a yearly basis, the SDPI report noted.
The study added that the government should take strict measures to curtail immense influence of the tobacco lobby over all the legislative bodies and avoid giving tax benefits to multinational companies, it said.
The study said the laws against tobacco products including cigarettes, should be implemented in letter and spirit as well as without any discrimination.
The study said that apart from this, the statistically false claim of tobacco companies regarding the illicit trade of cigarettes should be rejected and no favours should be offered to them in taxation, it said.