Saturday, June 15, 2024

Illegal Trade of Cigarettes Causes Annual Losses of Rs. 1000 Billion to Pakistan

According to analysts, two out of every five cigarettes sold in Pakistan are sold through tax evasion, putting Pakistan among the top Asian countries for illegal cigarette trade, he explained.

The illegal trade of cigarettes is causing an annual loss of Rs 100 billion to the national exchequer. A track-and-trace system has been put in place to do rid of tax fraud from five main industries, including tobacco, cement, sugar, fertiliser, and petroleum, according to Ashraf. If this system is effectively implemented in the entire cigarette industry, tax collections will increase.

Instead of concentrating on tax evaders and the collection of the Gas Infrastructure Development Cess as Pakistan battles one of the worst economic crises in its history, the nation’s policymakers and tax authorities are concentrating their efforts on obtaining the maximum amount of tax from the current taxpayers (GIDC). 

According to data released by the Federal Board of Revenue (FBR), tax collections are likely to fall short of the target by Rs 170 billion this fiscal year due to a decline in economic activity and the forex crisis. Experts believe the FBR’s tax collection is likely to be limited to Rs7,300 billion, against the target of Rs7,470 billion.

The economy is dealing with both an internal and external deficit. According to the analysts, in order to contain these deficits, the government’s objective is to raise more revenue through a mini-budget in addition to raising the petroleum levy.

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