Large quantity of tobacco seized from Mardan politician’s site

ISLAMABAD: The Federal Board of Revenue (FBR) on Tuesday seized 100,000 kg tobacco from an unregistered premises of an influential politician in Mardan.

It is estimated that duty and taxes worth approximately Rs30m to 40m were allegedly evaded.

In a separate raid, the tax authorities seized one million kg tobacco from another site owned by another influential person. The FBR has initiated investigations but no case has been registered so far.

Under the excise law, it is the responsibility of taxpayer to register locations for stocking commodities and products but in both cases the influential persons had stocked tobacco at undeclared sites. “It involves millions of rupees in taxes and duties in both cases,” said one top official of the FBR and added that they were not disclosing the names of accused because the tax authorities had not yet registered cases against them.

The FBR jacked up advance tax on unprocessed tobacco leaf at Green Leaf Threshing (GLT) from Rs10 per kg to Rs390 per kilogram through a “mini-budget” during the current fiscal year after which there was a hue and cry by using the name of farmers. However, the FBR argued that it was advanced Federal Excise Duty (FED) which was adjustable and meant to curb illicit cigarettes. There were certain alleged players who were involved in the illicit tobacco industry and earning billions of rupees by evading taxes. There is an incentive for certain players for stocking un-taxed tobacco by avoiding payment of Rs 390 per kg tax and then making and selling untaxed cigarettes in the market. The FBR has not yet done any study to ascertain the share of illicit cigarettes but there are estimates in the range of Rs 40 billion on annual taxes causing loss to the national exchequer.