FBR directed to amplify tax on imported tobacco

ISLAMABAD: A special committee of the Senate on Wednesday asked the Federal Board of Revenue (FBR) to compare tax frequency on imported and domestically produced tobacco, as there is multi-billion tax prevarication scam observed in tobacco division.

The Senate Special Committee is based on the reason of reduction in Tax Collection of Tobacco Sector, which is headed by its convener Senator Ms Kalsoom Parveen was informed that the government has forced Rs 300 per kg on tobacco exports in the previous budget, but at the same time on imports it accumulate only Rs 22 per kg.

Senator Dilawar Khan notified the committee that the discrepancy in duty arrangement has deficiency blown the manufacture of tobacco in various regions of Mardan, Swat & Swabi, respectively. Also, he asserted on the fact that extreme taxation has made the tobacco business almost idle.

However, the committee suggested elevation in duty on tobacco imports to the FBR, and also requested to reevaluate taxation system on export of tobacco.

FBR Chairman Jehanzeb Khan updated the committee that revenue collection from tobacco sector is almost up to Rs 88.54 billion in 2017-18 as compared to Rs 74.107bn over the preceding year. However, the revenue compilation from the tobacco sector was Rs 111billion in 2015-16.

Mr Jahanzeb stated that the inferior collection was mostly due to a plunge in cigarette production. However, the revenue assortment in the current fiscal year is projected to cross Rs 100 billion by June end 2019, whereas the subsequent year’s target from the tobacco sector is Rs 120 billion.

Moreover, Senator Parveen asked the FBR officials to present a detailed report in the upcoming committee meeting over the Rs 40 billion drop in revenue collection from the tobacco sector, which is to be completed within one month’s time after detailed audit.