FBR probes distributors’ involvement in cigarettes’ benami sales

Sources say the sales department officials not only keep such type of sales out of the FBR’ radar but also make financial transaction through their personal bank accounts

KARACHI: The distributors in Karachi are reportedly involved in benami sales of non-duty paid cigarettes, Pakistan Today learnt on Thursday.

Sources said that after receiving a complaint about involvement of the local distributors in benami sales of non-duty paid cigarettes, the Federal Board of Revenue (FBR)’ Anti-Benami Zone-III Karachi has ordered an inquiry to gather third-party information of the local distributors to assess the genuineness of the complaint.

The complaint alleged that the tobacco companies have used their sales department officials as front men as these people have supplied cigarettes worth billions of rupees to the local distributors.

The sales department officials not only keep such type of sales out of the FBR’ radar but also make financial transaction through their personal bank accounts, causing loss to the national exchequer, sources added.

The Inland Revenue’s enforcement, and Intelligence and Investigation teams have seized around 4.4 million non-duty paid cigarettes, worth Rs9.75 million, in the last six months.  Moreover, the customs department has also confiscated smuggled cigarettes, worth Rs5.4 million, during the said period.

On the other hand, the department has also recovered approximately Rs2.2 million in taxes from warehouses and shops.

Overall, the local industry just pays 2 per cent tax whereas the multinational companies deposit 98 per cent tax.

Sources said that the Anti-Benami Zone will not only get the details of the companies’ sales department officials but also of the distributors so it could know the exact statistics of transactions between the officials and distributors.

The department has also sought the companies’ registered details in order to unearth the tobacco industry’s involvement in benami sales.

It is pertinent to mention that tobacco sector costs Pakistan over Rs100 billion on yearly basis due to counterfeit and non-duty paid cigarettes.

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