Action sought against multinational tobacco companies over alleged tax violation

Islamabad: The Centre for Research and Dialogue (CRD) on Friday asked the finance minister for action against alleged violation of the country's tax laws by multinational cigarette companies.

The CRD pointed out blatant violations through a letter.

The development comes at a time when the Ministry of Finance is struggling to broaden the tax net and plug the loopholes in the tax machinery.

The letter urged prompt action against the violations of the Federal Excise Act 2005 after the multinational cigarette companies introduced new variants of the same brand family at significantly lower prices.

According to the rules, no manufacturer or importer of cigarettes can introduce or sell a new variant of a cigarette brand at a price lower than the lowest actual price within the same brand family.

Despite this regulation, the Pakistan Tobacco Company (PTC) has launched a new brand, Capstan International, priced at Rs 164, substantially lower than its existing family brand, Capstan by Pall Mall, which is priced at Rs 212.

Amjad Qamar, Director of CRD, highlighted the implications of this violation, emphasizing that it not only breaches tax regulations but also contributes to making cigarettes more affordable, which is detrimental to public health and reportedly 337500 people lost their lives due to tobacco related diseases annually in Pakistan.

In his letter to the Finance Minister, Qamar has urged swift and decisive action to address this issue and uphold the integrity of tax laws aimed at safeguarding public health and ensuring fair market practices.