ISLAMABAD
Federal Minister for Commerce, Jam Kamal Khan assured the tobacco industry that the government would carefully examine its proposals regarding taxation, enforcement against illicit trade, and measures aimed at strengthening Pakistan’s documented economy while promoting investment and exports.
The assurance came during a meeting with a delegation of Pakistan Tobacco Company (PTC), which discussed budget-related proposals, challenges facing the tobacco sector, and measures required to curb the growing illicit cigarette trade, said a release issued here on Thursday.
The PTC delegation informed the Minister that strengthened enforcement measures over the past year had contributed to a reduction in the share of illicit cigarettes in the market, resulting in improved government revenues and growth in the documented sector.
The delegation noted that continued enforcement against non-duty-paid and smuggled cigarettes could further enhance tax collection and create a more level playing field for legitimate businesses.The delegation also highlighted concerns regarding the increasing influx of smuggled tobacco products, particularly through border regions, and requested stronger action against illicit trade networks.
The PTC emphasized that cigarettes have become one of the most lucrative smuggled products, causing substantial losses to the national exchequer and undermining compliant manufacturers. The company urged the government to restore a simplified Final Tax Regime (FTR) mechanism for imports and to rationalize tax policies in a manner that discourages illicit trade while encouraging documentation and investment.
It also called for broadening the tax base by bringing the undocumented sector into the formal economy rather than placing additional burdens on existing taxpayers. The delegation further pointed out that Pakistan’s business community was facing multiple challenges, including high taxation, elevated financing costs, increasing compliance requirements, and provincial levies, all of which were affecting competitiveness and discouraging investment.
The concerns were also expressed regarding the migration of skilled professionals, with businesses finding it increasingly difficult to retain experienced human resources. Speaking on the occasion, Jam Kamal Khan acknowledged the industry’s concerns and stressed upon the importance of maintaining a balance between revenue generation and economic growth.
