Every year without fail in the months leading up to the federal budget, journalists are inundated with a slew of messages and phone calls from different industries.
Messages start circulating on Whatsapp groups detailing the plight of a particular sector. Classmates you have not seen in years but who now work in PR suddenly hit you up with an “AOA” message. Phonecalls start pouring in from people you met once at an event. The reason is invariably the same. They want to talk about taxation.
The budget season AOAs are a normal journalism job hazard. And as annoying as the deluge gets, one cannot fault the PR merchants for trying to do their job. Corporate lobbying in Pakistan is a stale and boring profession. It mostly involves forming industry associations, having lots of meetings of no substance, and constantly cribbing to the government and the media. When budget season rolls around, complaining is a preventative measure to taxation. Corporate PR types genuinely believe that if they drum up enough pressure in the government and get the media to back them they will be able to avoid a new taxation burden.
But inside this landscape one of the most interesting groups lobbying for their interests is tobacco. The big difference with their strategy is that most of the lobbying they do involves demanding more taxation on the sector. Why? Because two multinationals, Pakistan Tobacco Company (PTC) and Philip Morris International (PMI), are the two biggest participants in the sector and control 90% of the documented cigarette market in the country. They also pay more than 90% of the government’s revenue collection on tobacco. But there is a catch here. These two companies claim that in reality they only really control around 65% of the market share, and 35% of the market is controlled by small-scale local cigarette manufacturers and tobacco producers that sell their product under the radar. The multinationals are constantly on a mission to push the government to bring their local competitors under the tax regime. Their advocacy might have come to some fruition this year, however, with the FBR Chairman singling out tobacco in his post budget remarks. The content in this publication is expensive to produce. But unlike other journalistic outfits, business publications have to cover the very organizations that directly give them advertisements. Hence, this large source of revenue, which is the lifeblood of other media houses, is severely compromised on account of Profit’s no-compromise policy when it comes to our reporting. No wonder, Profit has lost multiple ad deals, worth tens of millions of rupees, due to stories that held big businesses to account. Hence, for our work to continue unfettered, it must be supported by discerning readers who know the value of quality business journalism, not just for the economy but for the society as a whole.To read the full article, subscribe and support independent business journalism in Pakistan
