Special Assistant to Prime Minister on Revenue Haroon Akhtar Khan has said the entire cigarette industry can fully utilize the benefits of third tier (revised federal excise duty structure) on cigarettes without any discrimination as both the multinational and domestic cigarette manufacturing companies can equally avail benefits of third tier (3rd slab of excise duty on cigarettes).
Responding to various queries at a pre-budget seminar organised by the Federation of Chamber of Commerce and Industry (FPCCI) here on Tuesday, Haroon Akhtar supported the documented and taxpaying legitimate cigarette industry.
He said the Federal Board of Revenue (FBR) is taking strict enforcement action against the sale of non-duty paid or illegal tobacco/cigarettes without any discrimination across the country. It is unfortunate that around 27 percent of the non-duty paid cigarettes are being sold in the country.
"We are not giving any special treatment or favour to the multinational cigarette manufacturing companies as the benefits of third tier on cigarettes are also being availed by the local cigarette manufacturing units." he said.
It is unfortunate that some of the illegal local units are selling cigarette pack even as low as Rs 25 per pack which is much less than the minimum retail price of Rs 48 per pack.
Haroon Akhtar Khan further said the amnesty scheme announced by the government is different from the schemes issued in the past. The purpose behind bringing the current tax amnesty scheme is economic development of the country and accelerating growth of the country, he claimed.
He said the scheme has been announced after having proper deliberations on international laws and trends, adding the objections to this scheme are baseless. If the government is able to get $5 to $10 billion under the scheme, a number of issues will get resolved to tackle the challenging issue of trade deficit.
Haroon Akhtar said the FBR is bringing policy reforms and measures to change the culture of Federal Board of Revenue (FBR). He said if the FBR is successful in removing fear and apprehensions of the business community, Pakistan would not require any foreign assistance. He said the government is trying its best to save economy from political instability.
He said the regulatory duties have been imposed to check imports of non-essential and luxury items and encourage exporteRs The trade agreements have resulted in increase in imports which have been timely checked by imposing regulatory duties and these are yielding positive impacts. During the previous month, exports increased by 24 percent and imports declined from 26 percent to 6 percent.
The FBR has provisionally collected net revenue of over Rs 2,621 billion during July-March (2017-18) as against Rs 2,260 billion collected during the same period of the previous fiscal year, reflecting an increase of around 16 percent. The tax to GDP ratio has also been increased during the year 2017-18.
He said it would be ensured in future that stakeholders be given full opportunities for giving their input in trade agreements while the traders community will have to take steps for the sake of its own interests as well.
FBR chairman Tariq Pasha informed the meeting that the FBR is not creating any problem for local documented industry or manufacturers operating legally and paying their dues taxes in the national kitty. "We are only against the illegal units which are evading taxes and making their compliant counterparts uncompetitive and ineffective. The FBR would continue with the policy of inspections and raids against the illegal units involved in tax evasion and causing massive loss to the national exchequer," he said.
The FBR will not spare tax evaders in cigarette industry but at the same time fully facilitate the tax paying complaint cigarette manufacturing units, he added.
For the first time in budget history, the FBR has patiently listened to the proposals and issues of the local cigarette industry thrice. These meetings between the local industry and FBR were held in the friendly atmosphere. "We welcome the legal and documented industry to come and present their proposals. If any compliant unit has grievances or issues, it is welcome to meet tax authorities at the FBR House, but we have no place for illegal tobacco industry, which is evading taxes and causing huge loss to the national kitty," he made it clear.
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