They said that the federal government is requested to reconsider the proposed imposition of new tax on tobacco so as to save the growers from financial crunch on this account and also save the viable cigarette industry as well as the tobacco dealers from collapse.
They said that the tobacco is a crop of great economic significance for Pakistan. Tobacco occupies a small area of only 0.27 percent of the total cultivated land in the country and about 3 percent of Khyber Pakhtunkhwa (KP). It is of great economic value as a source of revenue, employment and foreign exchange earning to the country. It is a highly intensive crop as about 75,000 persons are involved in its cultivation, 50,000 are engaged in cigarette factories of the tobacco industry and another 1.2 million find indirect employment in retail trade outlets.
The federal government has levied a new additional tax @ Rs 300 per kilogram on tobacco. The representatives and office-bearers of Khyber Pakhtunkhwa Labour Federation, Sarhad Agricultural & Rural Development Organisation and growers of tobacco from Khyber Pakhtunkhwa have demanded for ending the newly announced additional tax on tobacco.
According to the aforesaid stakeholders, tobacco sector of Khyber Pakhtunkhwa contributes Rs 100 billion annually in national exchequer, but newly introduced Rs 300/kg tax on growers of tobacco will crush this sector, especially the tobacco growers in Khyber Pakhtunkhwa.
Meanwhile, Khan Faraz, former Secretary Pakistan Tobacco Board, told Business Recorder that tobacco is a highly labour-intensive and cost-oriented crop. It is cultivated in areas of KP province where poppy was cultivated previously. However, with effective ban on poppy cultivation by the government and through the efforts of Pakistan Tobacco Board (PTB), tobacco companies and tobacco growers, it has become a main cash crop in these areas. Any decrease in income of tobacco in the form of imposition of new tax will be greatly resented by the growers for whom tobacco is a source of livelihood especially in KP province. Also, tobacco and cigarettes are highly taxed commodities in the form of federal excise duty and sales tax of the federal government and tobacco cess & tobacco development cess, collected by the PTB and provincial government of KP respectively. Therefore, imposition of new tax on tobacco purchase will hit hard the tobacco growers.
In view of the above, the federal government is requested to reconsider the proposed imposition of new tax on tobacco so as to save the growers from financial crunch on this account and also save the viable cigarette industry as well as the tobacco dealers from collapse, Khan Faraz added.