Tax relief not justified

A recent study has indicated that sales of illicit cigarettes account for under nine percent of Pakistan’s market, according to a story in the Express Tribune.
The results of the Study to Assess the Volume of Illicit Cigarette Brands in Pakistan was launched on Wednesday by the Pakistan National Heart Association and the Human Development Foundation.
They indicate that tobacco-industry claims that illicit cigarettes account for more than 40 percent of the market are wrong.
The results are said to indicate also that the third tier of taxation introduced by the Federal Bureau of Revenue (FBR) to give relief to tobacco companies was not justified.
The FBR initiative is said to have caused a loss of billions of rupees to the government exchequer and to have increased tobacco consumption considerably, increasing the nation’s health burden.
The study was carried out recently under the technical guidance of the Knowledge Hub on the Economics of Tobacco Control Project, which is part of the World Health Organization’s Framework Convention on Tobacco Control (FCTC).
It assessed volume sales of illicit cigarettes in 10 cities and their adjoining rural areas across Pakistan.
Data from Karachi, Lahore, Sukkur, Multan, Hyderabad, Peshawar, Quetta, Rawalpindi, Muzaffarabad and Nowshera, were said not to have supported tobacco-industry claims.
The study said there was no justification for the tax break provided by the third tier.
All tax relief should be removed and taxes on tobacco should be increased, the study recommended.
The full story is at: https://tribune.com.pk/story/1677803/1-research-says-illegal-cigarette-sales-less-9/.