Affixing tax stamp on cigarette packs: Cigarette manufacturers concerned at proposal by FBR

Small Cigarette Manufacturers Association has expressed concern over recent proposal of the Federal Board of Revenue (FBR) for affixing tax stamp on cigarette packs, terming it impracticable.
The Small Cigarette Manufacturers Association has written a letter dated March 26, 2013 to the concerned officials of FBR, Federal Tax Ombudsman and the Ministry of Finance protesting that the recent move of the FBR seeking proposals for 'Procurement Tax Labels and Supervision System' is totally injustice with the local cigarette manufacturers.
According to the letter of the Swabi-based association, millions of smuggled cigarette packs of PINE brand without any health warning are being sold in Pakistan. It is not understandable how putting a new tiny tax stamp would help FBR, when absence of a much larger and clearly visible health warning on each PINE pack is unable to stop open sale of that brand.
The letter further said that the FBR should send a team of its senior officials to study about the impact of tax stamping on cigarettes in those few countries which did introduce such paper stamps. The question arises that who will ensure that in Pakistan counterfeit tax stamps are not in market? Why FBR wanted to adopt a measure which has failed to achieve the desired results in other tax administrations? The Association proposed that the proposal of the FBR should be withdrawn regarding tax stamping on cigarette packs.
It is worth mentioning here that the FBR has constituted a committee to examine proposal of tax stamping on cigarettes manufactured by local industry. The committee comprised stakeholders like Chief Sales Tax/Federal Excise, Directorate General of Intelligence and Investigation Inland Revenue, multinational cigarette manufacturing companies and others to check illicit trade of tobacco through tax stamping on cigarettes. The FBR reportedly intends to implement a tax labels/stamps and supervision project for the purpose of eliminating tax evasion from the cigarette sector. The committee would ensure all aspects of the projects including its implications on the cigarette industry.