Sources said that although tobacco was grown on around 0.20 percent of total cultivated land of Pakistan, the crop played an important role in Pakistan's economy by generating income and employment in tobacco farming, manufacturing, distribution and retailing. A special committee headed by Senator Kulsoom Perveen was submitted a presentation by Pakistan Tobacco Board over number of growers, area of cultivation as well as on mechanism of price fixation and sector contribution in term of cess collection during the last five years.
The meeting was told that cess collection had increased from Rs 168.945 million in 2012-13 to Rs 298.260 million in 2017-18 with Rs 155.568 million from tobacco companies and Rs 142.692 million from auction of cess collection contractor.
The collection of five percent advance income tax stood at Rs 465.583 million so far in 2018-19 as opposed to Rs 462.92 million for 2017-18. Five percent advance income tax collection from companies was Rs 443 million during 2017-18 and from contractor was Rs 19.06 million while in 2018-19, it stood at Rs 423.493 million from companies and Rs 42.90 million from contractor.
The meeting was told that there are approximately 75,000 tobacco growers producing tobacco all over Pakistan. Out of these more than 45,000 growers are located in Khyber Pakhtunkhwa producing 95 percent of Flue Cured Virginia over an area of 25,500 hectares in the districts of Swabi, Mardan, Charsadda, Buner and Mansehra. On average, 70-80 million kg of FCV, which is the main ingredient of cigarettes, is produced by growers of these districts each year.
Regulatory and oversight of the sector is done by the Pakistan Tobacco Board (PTB) and it also carries out cost of production (CoP) survey before fixation of the minimum indicative price (MIP).
The meeting was told that PTB fixes prices of various types of tobacco for different areas and it is notified by the federal government. Prior to fixation of minimum indicative price, cost of price survey is carried out by the committees constituted by the PTB in the month of October each year.