LAHORE – Surge in the prices of locally manufactured cigarettes due to hefty increase in the federal excise duty has caused smokers to look towards alternative options.
Regulated industry is the ultimate sufferer of people shifting to duty evaded and smuggled brands due to high inflation and unprecedented increase in cigarettes prices.
As such, the recent tax measures have not decreased smoking due to easy availability of low priced smuggled and duty evaded cigarettes. The scenario, however, has affected businesses of tobacco companies already paying taxes. As these companies have cut down production, farmers are getting low price for their produce.
More than 50,000 growers are producing tobacco across Pakistan. Out of these, 23,964 are cultivating tobacco in Swabi, Mardan, Charsadda, Buner and Mansehra districts of Khyber Pakhtunkhwa.
Mushfiq Ali Khan, President of Anjuman-i-Kashtkaran (KP) has said that farmers were not getting due returns for crops due to considerable decrease in sales of the legal industry. He said that huge taxes and a considerable decline in sales have compelled the regulated industry to limit their tobacco purchases.
“On the other hand, the illicit cigarette manufacturing industry offers farmers unfair prices for their tobacco, with no guarantee of timely payment. Faced with this predicament, farmers are left with no choice but to rely on the illegal cigarette industry”, he said.
Mr Mushfiq said that that tobacco is an important cash crop in KPK, supporting the livelihoods of thousands of families dependent on tobacco cultivation.
The regulated, tax-paying industry plays a crucial role in enhancing the quality of tobacco farming and ensuring prompt and equitable compensation for farmers.
The unprecedented increase in the federal excise duty on the regulated industry has only further aggravated the challenges faced by tobacco farmers.
He called upon the government to reduce the federal excise duty on cigarettes, enabling the regulated and lawful industry to resume purchasing from tobacco farmers, ensuring timely payments, and safeguarding farmers’ livelihoods while also bringing the illegal cigarette industry under the purview of the law. This would provide better aid to the government in achieving its cigarette tax targets.
