Speaker National Assembly Asad Qaiser stressed the need for protecting the interest of the tobacco farmers and ending their exploitation.
He urged the Federal Board of Revenue (FBR) that the burden of tobacco taxation should not be passed on to growers and that the tobacco farmers should be provided maximum relief as they constitute the most vulnerable segment in the entire tobacco value chain. He was chairing a meeting at Parliament House, Islamabad to discuss the budget proposals for giving relief to the tobacco growers, says a press release issued here on Thursday.
A working group on tobacco growers concerns constituted by the Speaker National Assembly and headed by the Parliamentary Secretary for Commerce Shandana Gulzar Khan, briefed the panel about the concerns of tobacco growers with reference to the current tax regime. Shandana Gulzar Khan underlined the need for striking a balance between revenue collections, health concerns and interests of the farmers.
Comprising the Members of the Special Committee on Agricultural Products, Members from tobacco growing districts, and provincial ministers, the panel maintained that the entire economy of tobacco growing districts revolve around single crop, tobacco, which serves as their sole source of livelihood. The Members remarked the FBR should not ignore the political economy and political dynamics of the tobacco growing regions. Qaiser highlighted that millions of households are affiliated with the tobacco value chain and emphatically stressed that the revenue authorities should pay heed to unintended effects of tobacco taxation on the growers.
The panel expressed reservations over the Federal Excise Duty on tobacco on the grounds that despite being an adjustable excise duty, it has negatively affected the farmers who are left with lesser avenues to sells their crop. KP provincial minister for sports, tourism, archeology and youth affairs outlined that levying FED at GLT stage has precluded the tobacco dealers, middlemen and mandiwalas to effectively engage in tobacco trade and has shrunken the bargaining power of the farmers.
The chairman FBR apprised the participants that the currently finance bill clearly states that the effect of Federal Excise Duty (FED) should not be passed on to growers and the burden should be entirely borne by the cigarette manufacturers. It was also highlighted that the FED was intended for tracking and tracing of tobacco purchases in order to prevent tax evasion. The FBR officials maintained that the local industry continue to evade taxes and cause a loss to the national exchequer. They remarked that the taxation regime never intended to press the tobacco farmers. The Chairman FBR and State Minister for Revenue sought recommendations of the panel and assured that such recommendations pertaining to preventing the burden of taxation being passed to growers will be incorporated in the finance bill.
Qaiser formed a taskforce to find viable solutions to protect the tobacco growers and present policy recommendations to the FBR by Tuesday, June 18, 2019.-PR