Officials of
Referring to a recent report issued By: Oxford Economics for
'The increase was alarming in fiscal year 2018-19. The share of illicit cigarettes in
At this rapid pace, the illicit trade was becoming a risk for both - taxpaying companies and government revenues - as the increasing price gap was becoming an issue for the companies and decreasing tax revenues for the government, he added. As per the report, the tax evasion of
The excise duty and sales tax levied on cigarettes represent an important source of revenue for the government. The federal excise duty and sales tax on cigarettes generated
But while these revenues are significant, the government is missing out on a further substantial sum. Pasha said this year the government was likely to lose
A substantial increase in excise duty rates have been witnessed in recent years, with the duty levied on the lowest-priced cigarettes increasing By: 93% in the period between
These increases, coupled with government's removal of the third excise duty band, appear to have undone the progress, and the market share of illicit cigarettes has once again increased.
'Consumers buy illegal cigarettes because, By: evading both excise and sales taxes, they are much more affordable than legal, tax-paid alternatives. By: evading these levies, the illicit trade is depriving Pakistani government of the much-needed revenue,' said PTC Senior Regulatory Affairs Manager
A declining legitimate market detrimentally affects the commercial viability of legal cigarette manufacturing operations in the country.
© Pakistan Press International, source