Senate panel asks FBR to revisit duty on tobacco for increasing exports

Duty on tobacco

The Senate Special Committee on Tobacco on Tuesday asked the Federal Board of Revenue (FBR) to revise the Statutory Regulatory Order (SRO) 1149 in order to encourage tobacco exports.

The meeting was headed by Senator Kalsoom Parveen who directed the FBR to revisit the said SRO and its clauses that has imposed Rs300 federal duty per kilogram on raw tobacco.

The committee was informed by member Senator Dilawar Khan that the value of per kg raw tobacco was around Rs180 but the SRO 1149 of 2018 had imposed Rs300 duty on it adding that that the multinationals could export green leaf threshing, whereas local manufacturers were unable to export a similar.

The committee also discussed the problem of allegedly illegal cigarette exports from Azad Jammu and Kashmir.

The Senate Special Committee was formed after losses worth Rs60-70 billion in revenue collections were detected from the tobacco sector despite multinational producers registering 60 per cent growth in their bottom-line profits.

Moreover, Ms Parveen also showed her displeasure at the decline in revenue collections from the tobacco sector in 2016-17.

She lamented that, “we are begging for few billion rupees world over and failing to tap the local resources. It all happened after the introduction of three-tier system because the two multinational companies shifted their products from second tier to 3rd tier and saved billions of rupees.”

Senator Parveen said that she would arrange another sitting with the FBR to review this issue very well and match the figures.

The meeting was also attended by senators Maulana Abdul Ghafoor Haideri, Azam Khan Swati, Hidayatullah, Dilawar Khan and senior officials from the Ministry of Commerce, FBR and Pakistan Tobacco Board.


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