ISLAMABAD: The Pakistan Tobacco Board (PTB) has urged Finance Minister Senator Muhammad Aurangzeb to reconsider the federal cabinet’s decision to dissolve the organization and transfer its core functions to provincial authorities.
In a letter to the Finance Minister, PTB officials condemned the move, describing it as unconstitutional and illegal. They argue that the decision to dissolve the PTB and transfer its functions to provincial authorities violates legal provisions.
Established under the Pakistan Tobacco Board Ordinance, 1968, the PTB is a self-generating federal body responsible for promoting the cultivation, manufacture, and export of tobacco products. The ordinance, passed in 1968, alongside subsequent regulations, governs the tobacco industry in Pakistan.
The officials stress that tobacco has always been treated as a federal subject due to its significance in trade, finance, and domestic industry. Transferring these functions to the provinces without new legislation, they warn, could create conflicts around tobacco cultivation, production, exports, taxes, and pricing.
They pointed to international examples, such as China, India, and Zimbabwe, where tobacco is managed as a federal subject due to its economic importance. Additionally, tobacco exports from Pakistan have grown significantly, from $42 million in 2019-2020 to $108 million by December 2024.
The PTB also highlighted that the Federal Board of Revenue (FBR) has collected over Rs. 237 billion in excise duties and sales tax from the tobacco sector in the current financial year. The PTB is expected to remit up to Rs. 600 million in taxes during FY 2024-2025.
Citing a 2012 clarification from the Law and Justice Division, the PTB emphasized that the Pakistan Tobacco Board Ordinance falls under the federal legislative domain, as specified in the Constitution. The letter further warned that devolution of tobacco-related functions could disrupt tax collection and regulatory processes.
In light of these concerns, PTB officials have urged the High Powered Rightsizing Committee to reconsider its decision for the greater benefit of the country.
