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Business community concerned over violation of rules by cigarette companies

April 20, 2024
The image shows a tobacco company worker busy with cigarettes. — AFP File
The image shows a tobacco company worker busy with cigarettes. — AFP File

Islamabad:The business community has raised serious concerns over the violation of rules and regulations by cigarette companies. Concerns regarding playing with rules and regulations for business and trade by cigarette companies are increasing with each passing day.

The business community was of the view that the law-abiding companies have to suffer due to the offense of the violators getting favours via undue means. President Rawalpindi Chamber of Commerce and Industries (RCCI), Saqib Rafique on Thursday demanded the government to plug the gaps in tax collection so that no one was allowed to mould laws in their favour. He said that loopholes in tax collection amount to giving undue favours to curtail or an individual.

As a result, law-abiding traders and industrialists have to bear burden in the shape of excessive taxes. Such practices run contrary to the principles of promotion of business and trade, the RCCI President said adding that the government should look into the matter. He was commending on media reports about alleged violation of Federal Excise Act 2005 by cigarette manufacturers.

To drive the point home, Centre for Research and Dialogue (CRD) has urged the finance minister for action against multinational cigarette companies allegedly involved in flagrant violation of the country’s tax laws.

The development comes at a time when the government was struggling to broaden the tax net and plug the loopholes in the tax machinery. In its letter, the CRD letter pointed out 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.

In a press release, the CRD stated that despite this regulation, the Pakistan Tobacco Company (PTC) has allegedly launched a new brand, priced at Rs164, substantially lower than its existing family brand.

Director CRD Amjad Qamar said, “The flagrant violations by multinational cigarette companies not only breach tax regulations but also jeopardize public health by making the cigarette more affordable.”