ISLAMABAD: The National Accountability Bureau (NAB) has launched probe into Rs33 billion worth of benefits taken by cigarette manufacturing companies after a change in tax structure.
A third tier in the tax structure was introduced in May 2017 by the government and subsequently major industry players shifted their famous brands to the lowest tax slab and sold cigarettes with 50% reduction in federal excise duty, which enhanced their sales, but government revenues plunged, according to the audit report prepared by the Auditor General of Pakistan.
According to reports, the Public Accounts Committee (PAC) had on May 23 also recommended a Supreme Court-led investigation on the basis of a special report on the causes of decline in tax collection from the tobacco sector.
Against the previous two-tier structure, the Federal Board of Revenue (FBR) introduced a new tier where the federal excise duty was 50% lower than the lowest previous rate. The FBR did not place restrictions on shifting from the second highest slab to the lowest one that gave Rs32.9-billion benefits to cigarette manufacturers, according to the report.
Report quotes NAB Rawalpindi spokesperson Muhammad Bilal as saying that the NAB had taken up the matter and the probe was underway.
It will take two months to check all the record while the entire probe would be completed in four months, he said.
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