ISLAMABAD: Since the International Monetary Fund (IMF) expressed worries about Rs80 billion in “tax evasion,” Prime Minister (PM) Shehbaz Sharif has ordered the relevant authorities to take action against illegal cigarette companies, it emerged on Monday.
According to details, the prime minister issued the directives during a meeting after the Fund expressed reservation over ‘tax evasion’ of Rs80 billion through trade of illegal cigarettes, ARY News reported citing sources.
The Federal Board of Revenue (FBR) has been instructed by PM Shehbaz to finish the track and trace system on all the cigarette manufacturing enterprises.
A nationwide crackdown on illegal cigarette manufacturing will be initiated by FBR Inland Revenue Intelligence teams, and a report on the situation will be provided to the IMF.
ARY News claimed that almost 24 cigarette manufacturing companies were still not included in the track and trace system.
The federal government increased cigarette taxes earlier in February with immediate effect in order to raise Rs 115 billion out of the anticipated Rs 170 billion mini-budget.
The basic General Sales Tax (GST) rate was increased from 17 to 18 percent with effect from February 15, 2023, according to the FBR statement. Also increased was the Federal Excise Tax (FED) on cigarettes.
FED on costly brands was increased by the government from Rs6.5 per cigarette to Rs16.5 — a 153% increase. For less costly brands, the increase in price per stick is 98% higher, from Rs2.55 to Rs5.05.
