ISLAMABAD -Multinational tobacco companies operating in Pakistan are introducing low-priced cigarette variants in an open disregard for the Federal Excise Act. This act prohibits manufacturers and importers from introducing a new cigarette brand variant at a lower price than the existing one within the same brand family.
However, certain multinational companies are blatantly finding new ways to violate the rules. One example is Pakistan Tobacco Company, which launched a new product, Capstan International, for Rs164. This unethical practice is putting public health at risk.
“This, prima facie, is a clear violation of the law. The existing brand is Capstan by Pall Mall, sold at Rs. 212,” said Dr Aman Khan, Director of Waseela Foundation.
He said that Philip Morris International, another multinational, had violated the act and the law prohibiting cigarette manufacturers from reducing retail prices from the level adopted on the day of the latest budget announcement.
Malik Imran, from Tobacco-Free Kids, said no company is allowed to sell any product below the price set by the government in the Federal Excise Act 2005.
Pakistan Observer, when approached, the representative of Pakistan Tobacco Company (PTC) highlighted that PTC takes pride in its track record of being a legally responsible Pakistani Company. In this regard, PTC is one of the most significant contributors to the government exchequer, with over Rs 500 Bn contributed to the government of Pakistan in the last five years in the form of excise duties and taxes.
Concerning the claim made by NGOs regarding loss to the government owing to the pricing of two PTC brands, Capstans International and Capstan by Pall Mall. Both brands fall under the 2nd tier of the federal excise duty structure wherein FED is levied at Rs 5050 per thousand sticks, and the same FED rate is being paid on both brands.
Suppose the said NGOs want to make cigarettes expensive to reduce consumption and maximize revenue. In that case, they should focus on more than 200 cigarette brands selling well below the minimum price mandated by the Pakistani government.
All these brands are not only openly flouting the laws on tobacco taxation. But are also openly violating the health laws concerning cigarette marketing in the country. Yet, surprisingly, these NGOs don’t even want to talk about these law-violating segments of the cigarette industry.
