CNIC condition costing Rs1.04 bn monthly on cigarette sales tax

ISLAMABAD: Pakistan’s formal sector of cigarettes industry have estimated a significant decline in their sale to the tune of 470 million sticks alone in September 2019 because of CNIC condition of the FBR.

This decline in sales is causing losses to the national exchequer of around Rs1.040 billion on a monthly basis, reported The News.

The sale of formal sector has declined exactly at a time when the share of duty non-paid (DNP) and smuggled cigarettes increased in recent months, resulting in loss of Rs300 million to national exchequer.

“Overall the government has been facing an estimated loss of over Rs1.5 billion a month on both these two accounts,” said industry sources quoted in the report.

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The Federal Board of Revenue (FBR) is eyeing to collect Rs140 billion from tobacco sector during the current fiscal year 2019-20 against the collection of Rs113 billion in the last fiscal year. The FBR had abolished three tier taxation system and came up with two tier taxation by jacking up tax rates to go close to align it with the recommendation of WHO for the purpose of discouraging consumption of tobacco.

However, the data of formal sector quoted in the newspaper report states that there were total 250,737 active outlets of Pakistan Tobacco Company (PTC) for selling cigarettes all over the country out of which 33,385 outlets reported zero sale in September 2019. It resulted in significant decline in sale out of 470 million cigarette sticks just in one month.

Owing to CNIC condition, total 33,385 outlets across the country had stopped selling of cigarettes. “It has caused a loss of Rs1.040 billion to the national exchequer as our sale has declined substantially,” sources were quoted as saying in the report.

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