P H I L I P M O R R I S C L A I M S T O B A C C O S E C T O R AT R I S K A S I L L E G A L C I G A R ET T E T R A D E S K Y R O C K ET S

ISLAMABAD

G H U L A M A B B A S

PAKISTAN’S documented tobacco sector is facing a grave threat as the illegal cigarette market continues to skyrocket resulting in substantial losses to the national exchequer Muhammad Zeeshan, Chief Financial Officer and Executive Director of Philip Morris (Pakistan) Limited, voiced his concerns during a press briefing in Islamabad highlighting the detrimental impact of the burgeoning illicit trade on government revenue and anti-tobacco policies Zeeshan expressed apprehension regarding the escalating illegal cigarette market cautioning that if this trend persists the government’s projected revenue targets will be severely undermined He pointed out that the government had recently raised the Federal Excise Duty (FED) by 200% in the current fiscal year Consequently, Philip Morris (Pakistan) experienced a staggering 70% decline in sales and a 60% decrease in production volume during March and April 2023 This downward trajectory is anticipated to continue due to the rise in illicit cigarettes

During the quarter ended March 31, 2023, Philip Morris (Pakistan) contributed significantly to the economy by paying Rs 5 990 million in excise duty sales tax and other government levies However this marked a 16 4% decrease compared to the previous period primarily due to reduced sales volume resulting from the price increase enforced by excise regulations in February 2023

According to him the steep rise in excise taxes has inadvertently provided an opportunity for illegal tobacco manufacturers to flourish, while compliant tax-paying companies suffer Consequently the government’s revenue objectives from the tobacco industry are expected to fall short of the targeted Rs 260 billion likely remaining below Rs 200 billion

It is important to note that the documented tobacco sector contributes a significant 98% of the total tax revenue from the tobacco industry while illegal cigarette manufacturers only contribute a mere 2% Highlighting the urgency of the situation, he called upon the government to take decisive measures to combat the illegal cigarette market, which currently commands over 40% of the total market share and is projected to rise to 50% If left unchecked, Pakistan could become one of the largest illicit cigarette markets globally Premier Shahbaz Sharif has already acknowledged a staggering loss of Rs 100 billion due to tax evasion by illicit tobacco companies

Furthermore

Zeeshan referenced research from Euro Monitor, a renowned firm, revealing that Pakistan held approximately 40% market share of illegal cigarettes in 2022, solidifying its position as the largest illicit cigarette market in South Asia According to him the government s track & trace system is only operational in a few tobacco companies Once the stay order on the track & trace system was lifted, he urged the government to expedite its

Could Pak istan expor t fruits and vegetables?

ALFV

Presents Ambitious Proposals For Upcoming Budget

ISLAMABAD G H U L A M A B B A S

In an effort to enhance the export potential and competitiveness of Pakistan s fruit and vegetable industry the All Pakistan Fruit & Vegetable Exporters Importers & Merchants Association (PFVA) has put forward a comprehensive budget proposal for the fiscal year 2023-24 The budget proposals, shared with the concerned ministry a copy of which is also available with this scribe focuses on key areas of concern and suggests strategic measures to address them

Fresh Kinnow: The budget proposal emphasizes the urgent need to develop new varieties of Kinnow, a popular citrus fruit The existing variety in Pakistan is 60 years old, leading to various diseases and reduced shelf life The PFVA proposes allocating PKR 100 million for extensive research and development to create new disease-resistant varieties This investment is projected to boost Kinnow exports from the current USD 110 million to $350 million within four years, benefiting the industry worth Rs 130 billion

No let-up in sight as Abrarul Haq, Saifullah Nyazee, Raas also quit PTI

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Addressing a press conference he said after the horrible incident of May 9 in different parts of the county I have decided to quit the party position as deputy secretary general Punjab He said he was parting ways with the PTI without any pressure from any quarter He said: “I have great regret and I also condemn the May 9 incidents The elements involved in the May-9 incident should be punished strictly To a question, Khurram said he had no offer from any party to join it As the crackdown intensified dozens of PTI leaders –including close confidants of Imran Khan – started jumping ship in what was described by the PTI chief as forced divorces Several party leaders were released on court orders only to be arrested again as there appeared to be no respite in the crackdown Several party leaders and lawmakers including Shireen

Mazari Aamir Kiani Amin Aslam

Mahmood Moulvi Aftab Siddiqui

Fayyazul Hassan Chohan, Firdous

Ashiq Awan and others have announced leaving the former ruling party Asad Umar one of the very close aides of Imran relinquished his posts of the secretary general and core committee member citing the ongoing situation His announcement came hours after Fawad Chaudhry, another close confidant of Imran quit the PTI On the other hand according to some other media reports senior PTI leaders Dr Yasmin Rashid and Mehmoodur Rasheed have expressed their continued support for Imran Khan, reiterating their commitment to remain with the party “No! I am not leaving PTI,” Dr Yasmin Rashid responded to journalists’ queries outside an anti-terrorism court Rashid also expressed her support for the former prime minister Despite all challenges, we stand firmly with Imran Khan, she said

Withdrawal of 10% FED on Juice Industries:

According to the association the imposition of a 10% Federal Excise Duty (FED) on packaged juices has adversely affected the industry Sales have plummeted by 45% leading to underutilization of production capacity and a decline in investments The PFVA recommends the withdrawal of this FED as it hampers sales tax revenue and negatively impacts employment in the allied industry By procuring fruits from local farmers, the industry can prevent food wastage and uplift farmers’ livelihoods

Exemption of Sales Tax on Mushrooms: To promote the local production of mushrooms the PFVA proposes exempting sales tax on fresh frozen or otherwise preserved mushrooms Currently a significant portion of mushrooms is imported from China and other countries This tax exemption would encourage local growers, discourage imports, and conserve foreign exchange reserves

Revision of Phyto-Sanitary Certificate Costs: The proposal highlights the need to revise the high costs associated with phyto-sanitary certificates for export consignments The recent increase of over 800% in charges for issuance of these certificates has placed an additional burden on exporters, especially those using air transportation The PFVA suggests revising the charges to a reasonable level to ensure the smooth functioning of the export industry

Exemption of Import Duty on Aseptic Bags: Aseptic packaging bags used to enhance the shelf life of products are currently imported at a significant cost

The PFVA recommends exempting import duties on these bags, as they are not locally manufactured This exemption would reduce costs for processing units and help meet the increasing demand for local fruit and juice industries benefiting both producers and consumers

Exemption of Import Duty on Spare Parts for Juice Industries: The budget proposal calls for the exemption of import duties on spare parts used in the manufacturing and processing of juice industries Currently, these parts are imported at considerable costs including import duties additional custom duties sales tax and income tax Exempting these duties would reduce production costs and enhance the competitiveness of local juice manufacturers in both domestic and international markets