Director General (DG) Intellectual Property Organisation (IPO) Syed Khalid Bukhari has urged government to empower IPO for setting up separate courts to take action against infringement of copyrights in industry, which is causing a revenue loss of billion of rupees to exchequer and blocking foreign investment as well.
Talking to Business Recorder, DG IPO said that violation of copyrights was a common practice in the country. "Pakistan ranks top among those countries where violation of copyrights is very common," he said adding that breach of copyrights is not only hitting the local industry on one side but also discouraging foreign investors to come to Pakistan.
"During conferences held in past on IP rights attended by Prime Minister, I had proposed to strengthen IPO by setting up separate courts to take action against those engaged in violation of property rights," he said adding that all stakeholders agreed with the suggestion to set up separate courts. He maintained that violation of property rights was also hitting the economy of the country. "We do not want to limit our role with registration of industry only but enforcement powers should be given to IPO," he added.
According to media reports, government faced a revenue loss of Rs 45 billion during last six years since 2005 on account of tax evasion, smuggling and counterfeiting in cigarette industry due to failure of government's authorities in taking concrete steps.
On the other hand, the legal manufacturers of cigarettes contributed Rs 56 billion in taxes to the national kitty during the fiscal year 2009-10 and Rs 46.7 billion in 2008-09. This illegal practice also deprived the AJK government of Rs 3 billion in revenues during 2009 and over Rs 2 billion in 2008.
Bukhari said that fake cigarette manufacturers were inflicting heavy losses on the public exchequer. "But we can not take action against these fake cigarette manufacturers because we do not enjoy enforcement powers," he said, adding that legal cigarette industry has also agreed with IPO to set up separate courts to take action against those who are involved in violation of copy rights.
"The corrupt practices in cigarette industry are not only damaging the indigenous legitimate industries, in terms of erosion of consumer confidence in genuine brands, but also blocking further investments," Bukhari maintained. There are 25 licensed cigarette factories in Pakistan, which provide direct employment to over 22,000 people, indirect employment to 87,377 people and consume the crop of some 71,000 cultivators.
The cigarette industry also provides business opportunities to some 160,000 people, who are involved in distribution and retail businesses. It is estimated that the cigarette market in Pakistan is far bigger than the size reflected in the sale of cigarettes by the legitimate sector. In 2009, the number of cigarette sticks sold in the domestic market stood at 80 billion sticks, which were nearly 13 billion sticks more than the total number produced by the country's formal sector.
Some 13 billion cigarettes or some 20 percent of the total trade were either smuggled or counterfeited with a view to evading taxes by the unscrupulous elements, who are also involved in the cropping of low quality tobacco and making of fake/substandard cigarettes and thus playing havoc with the lives of consumers to make a few fast bucks.