Tobacco manufacturers accuse FBR of violating rules | Pakistan Today

Tobacco manufacturers accuse FBR of violating rules

In haste to issue an Request for Proposal for the Procurement Tax Labels and Supervision System to tackle illicit trade of tobacco in Pakistan, the Federal Board of Revenue (FBR) has resorted to sheer violation of the PPRA Rules 2004., through its tendering process advertised on March 13, 2013.
Expressing their concerns in a press conference, the tobacco manufacturers said that the system will fail to increase revenues for the government on the one hand and burden the legitimate, taxpaying tobacco industry and its customers on the other.
They were of the opinion that, FBR’s plan to introduce Procurement Tax Labels and Supervision System in its current shape will not result in achieving the objective of curbing the illicit trade in Tobacco products, as the system specified in the RFP has already failed to curb illicit trade or increase revenues in number of countries, including Malaysia, Turkey, Brazil, and was rejected in many states of the USA.
Meanwhile, experts and international stakeholders have already pointed out that the particular tender process initiated by FBR and the specified solution and requirements are solely focused on the use of paper-based stamps and this shows that only one very specific solution could meet the tender requirements as currently stipulated. This bears the high risk for the Federal Board of Revenue (“FBR”) that there is not enough competition for the most effective solution possible – in terms of both functionality and cost.
International security solution providers are also of the opinion that these stamps are generally very expensive, require a high capital investment, can easily be lost, stolen or counterfeited and require a complex process of manufacturing, distribution, storage and application.
Tobacco manufacturers are of the opinion that this system cannot provide for tracking and tracing in the sense of the WHO FCTC protocol to eliminate illicit trade in tobacco products, which was also confirmed by independent WHO reports.
They suggested the FBR to opt for more modern and cost effective solutions available today based on state of the art technologies including tracking & tracing capabilities that would be much more effective in addressing illicit trade issues. They also indicated that the current RFP seems to be designed to benefit one particular supplier and if the process goes ahead, legal clangs won’t be far away.

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