Thursday, December 8

National Assembly Panel to Overhaul Tobacco Regulatory and Taxation Regime

Islamabad, September 21, 2021 (PPI-OT):The Speaker National Assembly Mr. Asad Qaiser underlined the need for strengthening tobacco regulatory and taxation regime to ensure decent profitability for the farmers as well as progressive increase in government’s revenue from tobacco industry.

He stated that information asymmetries, regulatory capture and inefficient taxation regime has stoked fears about collapse of tobacco market for the poor farmers, exorbitant profits for tobacco industry without commensurate increase in government’s revenue from cigarettes industry, and rampant tobacco consumption in Pakistan.

It was also outlined that upward revision of taxes levied on cigarettes was the only route to discourage smoking and raise government’s revenue. He made these remarks in a meeting with the Chairman Pakistan Tobacco Board on Tuesday. The Speaker urged the Chairman Pakistan Tobacco Board to personally examine the tobacco purchase process and leave no stone unturned to end farmers’ distress vis-a-vis tobacco marketing.

He added that the Special Committee on Agricultural Products desired transparency and fairness in transaction between the farmers and industry to ensure that the farmers fetch decent profitability for their toil. He also urged the Chairman Pakistan Tobacco Board to expedite the processing of meeting codal formalities for conducting a third party survey to ascertain the cost of production through a transparent mechanism.

He instructed that the farmers’ current distress should be addressed on war footing basis and further directed that the report of Governance Inspection Team on tobacco marketing should be furnished to the Special Committee on Agricultural Products.

The Speaker stated that Cigarettes being a luxury good with negative externalities are taxed heavily across the world while its prices in Pakistan are one of the lowest in the world. Increase in tobacco taxation is the need of the hour for controlling the consumption of cigarettes and for increasing the revenue of the national exchequer.

He indicated that the matter will be taken up with FBR to ensure progressive increase in tobacco taxation in line with the global increase in cigarettes prices and to ensure prevention of tax evasion and smuggling. He also highlighted that the incidence 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.

Asad Qaiser remarked that in order to balance the interest of the farmers, tobacco companies, government’s revenue and consumer’s health, it is the need of the hour to revise and amend the laws regulating production marketing and taxation of tobacco.

He stated that an inefficient regulatory regime could not protect the interests of the farmers and underlined the need to revisit more than 50 years old legal framework regulating tobacco production and marketing. He tasked the Sub-Committee to thoroughly examine the regulatory framework and recommend necessary amendments. The Speaker also formed a taskforce comprising members of the National Assembly to visit the tobacco growing regions and examine the issues in the current marketing processes.

For more information, contact:
National Assembly of Pakistan
Automation Centre, National Assembly Secretariat,
Parliament House, Islamabad, Pakistan
Tel: +92-51-9221082-83
Fax: +92-51-9221106