Cigarette industry causes Rs 45 billion revenue loss | Pakistan Today

Cigarette industry causes Rs 45 billion revenue loss

ISLAMABAD: Government has sustained a loss of revenue amounting to Rs 45 billion during the last six years due to tax evasion, smuggling and counterfeiting in the cigarette industry. Resultantly, the failure of the authorities to take concrete steps to curtail these violations has come under the spotlight.
According to a press release issued on Wednesday, industrial data reveals that government had to face a revenue loss of Rs 7.5 billion in the current year, Rs 6.5 billion in 2009, Rs 6.0 billion in 2008, Rs 5.59 billion in 2007, Rs 5.48 billion in 2006 and Rs 4.1 billion in 2005 in the case of tax evasion alone.
Additionally, counterfeiting in cigarette industry took an additional toll. It is estimated that the government had to bear a revenue loss of Rs 0.5 billion in current year, Rs one billion in 2009, Rs 0.25 billion in 2008, Rs 0.24 billion in 2007, Rs 0.10 billion in 2006 and Rs 0.48 billion in 2005 due to counterfeiting.
It has been determined that smuggling caused losses of approximately Rs 1.5 Billion in current year, Rs 1.5 billion in 2009, Rs 1.22 billion in 2008, Rs 1.34 billion in 2007, Rs 1.22 billion in 2006 and Rs 1.4 billion in 2005.
The consensus amongst industry sources was that the government had failed to take practical measures to halt tax evasion, counterfeiting and smuggling in cigarette industry; resulting in the loss of billion of rupees to the exchequer.
A large number of factories are engaged in manufacturing fake cigarettes in areas of Khyber Pakhtunkhwa including tribal areas, Azad Kashmir, Sargodha, Okara and Bahawalangar but government authorities are apparently reluctant to take action against them.
The government had planned to institute raids and initiate action against tax evasion, counterfeiting and smuggling in cigarette industry. “But the plan has yet to be implemented while tax evaders and smugglers have a free hand in their activites,” sources lamented.



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