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Business community perturbed over violation of rules by cigarette companies

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

The business community believed that law-abiding companies have to suffer due to the offence of the violators getting favours via undue means.

President of the Rawalpindi Chamber of Commerce and Industries (RCCI), Saqib Rafique, demanded that the government 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 an individual.

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

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

This development comes as the government struggles to broaden the tax net and plug loopholes in the tax machinery.

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, Capstan International, priced at Rs 164, substantially lower than its existing family brand, Capstan by Pall Mall, which is priced at Rs 212.

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.”

In a letter to the finance minister, Qamar has urged swift and decisive action to address this issue and uphold the integrity of tax laws aimed at safeguarding public health and ensuring fair market practices.

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