Pakistan's tobacco exporters urge competitive tax model, cite challenges for smaller firms
A delegation of leading tobacco exporters raised these concerns during a meeting with Federal Minister for Commerce Jam Kamal Khan on Monday, read a statement released by the commerce ministry on Tuesday.
During the meeting, exporters pointed out that the current tax structure—which includes a Federal Excise Duty (FED) of Rs390 per kg, Provincial Excise Duty (PED) of Rs50 per kg, Federal Tobacco Cess of Rs15.15 per kg, and a Provincial Development Cess of Rs25 per kg—totals Rs480.15 per kg.
'They said this cost poses a challenge, particularly for smaller exporters and suggested that a more competitive taxation model would help enhance Pakistan's position in the global tobacco market,' read the statement.
The exporters emphasised that tobacco, like other agricultural commodities such as sugarcane, cotton, and citrus, should be supported through market-based policies. They noted that annual price adjustments are mandatory under current regulations, which can affect competitiveness in export destinations.
Kamal acknowledged the concerns and reiterated the government's commitment to balanced and growth-oriented policies.
He remarked that optimal revenue generation comes not only from taxation but also from industrial expansion and boosting exports.
Tobacco revenue can increase by bringing illicit trade into tax net
Kamal noted that similar concerns have been raised by other sectors, such as beverages, regarding the impact of high taxation on consumer demand and revenue collection.
The tobacco exporters also called for the revival of the Pakistan Tobacco Board (PTB) to support coordinated efforts in export promotion and policy facilitation. In response, Kamal proposed the establishment of a Sectoral Council for Tobacco, similar to other existing sectoral councils, to provide a structured platform for industry dialogue and representation.
The minister further informed the delegation that a revenue policy committee has been made independent of the revenue collection mechanism—an important step toward more informed and consultative policymaking.
Meanwhile, exporters appreciated the government's ongoing efforts to promote trade and highlighted the significant contribution of the tobacco industry to employment, rural development, and export earnings. They shared that with targeted facilitation, tobacco exports have the potential to increase substantially, supporting national revenue goals.
Exporters appreciated Kamal and expressed confidence that with continued government support, the industry could significantly increase its export footprint, read the statement.
Pakistan's tobacco exports reached $158.35 million in the current fiscal year (July–April), with promising growth in markets such as Belgium, UAE, Greece, and the Philippines.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Express Tribune
5 minutes ago
- Express Tribune
NA panel probes sugar price, tobacco woes
PML-N-led coalition government in the Centre now has 229 members in the NA. PHOTO: APP The National Assembly Standing Committee on National Food Security on Friday underscored the importance of investigating the causes behind the sugar price hike and exploring possible measures for market stabilisation and consumer relief. The committee met here with Syed Tariq Hussain in the chair. Committee Member Zulfiqar Ali raised the issue of sugar prices and urged the chair to include it in the next meeting's agenda. He said that the industry reaped Rs300 billion in profits, while consumers suffered losses. "Farmers and consumers have suffered losses. This matter should be included in the upcoming [meeting's] agenda," Ali said. Later, the committee decided to include the sugar price issue on the agenda for its next meeting. The committee discussed the issues facing tobacco growers. The committee was informed that Federal Board of Revenue (FBR) officials had been appointed to 23 tobacco companies to monitor tobacco. The chair underscored the importance of increasing tobacco cultivation. "If we look at the region, the world has gone far ahead at the policy level," Tariq told the committee. "The world has come a long way in the use of drones and other technologies in the farming sector," he said. "We need support at the policy-making level." The committee was informed that general sales tax (GST) was imposed on cigarettes, not on tobacco. It was also informed that approximately Rs949 million allocated for research and development remains unutilised due to the vacant director position at the Pakistan Tobacco Board (PTB). The chair instructed the ministry to expedite the appointment to all vacant posts at the PTB and its related committees so that the pending development and reform initiatives could move forward without any delay. The meeting was updated on key areas, including the current tobacco taxation policy, the framework for collection and utilisation of the cess fund over the past 10 years, the PTB's corporate social responsibility (CSR) initiatives, and the potential introduction of a crop insurance scheme for tobacco growers. The committee was informed that the PTB had constituted committees to oversee cess regulation, CSR programmes, and development activities. However, the committee raised concerns over the exclusion of tobacco growers from these bodies. In response, the committee directed the ministry to ensure that representatives of tobacco growers are included in all relevant committees, stressing that meaningful reform and facilitation measures could not succeed without their direct involvement. The committee also held a detailed discussion on reports of donkey meat being sold in Islamabad, expressing serious concern over the public health risks and regulatory negligence. The ministry was instructed to take up the issue with the relevant authority and report back in the next meeting. During a presentation by CropLife Pakistan, the committee was informed that the organisation's mission was to support farmers in producing enough food to meet the needs of a growing population through access to innovative agricultural technologies. (WITH INPUT FROM APP)
Business Recorder
6 hours ago
- Business Recorder
Oil falls more than $2 a barrel on worries about OPEC+ supply, US jobs data
HOUSTON: Oil prices fell more than $2 a barrel on Friday morning on jitters about a possible increase in production by OPEC and its allies, while weaker-than-expected U.S. jobs report fed worries about demand. Brent crude futures were down $2.04, or 2.85%, at $69.66 a barrel by 9:52 a.m. CDT (1452 GMT). U.S. West Texas Intermediate crude was down $1.95, or 2.82%, at $67.31. Both benchmarks remained on track for weekly gains. Three people familiar with discussions among OPEC members and allied producers said the group may reach an agreement as early as Sunday to boost production by 548,000 barrels per day in September. A fourth source familiar with OPEC+ talks said discussions on volume were ongoing and the hike could be smaller. The U.S. Labor Department said the country added 73,000 jobs in July, lower than economists had forecast, raising the national unemployment rate to 4.2% from 4.1%. 'We can blame U.S. President Donald Trump with the tariffs or we can blame the Federal Reserve for not raising interest rates,' said Phil Flynn, senior analyst with Price Futures Group. 'It looks like the Fed misjudged their decision on Wednesday.' On Wednesday, the Fed voted to keep interest rates unchanged, drawing criticism from Trump and a chorus of Republican legislators. Oil lost more than 1% in the previous session, though Brent remained on course for a weekly gain of 4.6%, with WTI headed for a weekly gain of 6.5%. Oil traders have focused on the potential impact of U.S. tariffs, with tariff rates on U.S. trading partners largely set to take effect from next Friday. Trump signed an executive order on Thursday imposing tariffs ranging from 10% to 41% on U.S. imports from dozens of countries and foreign territories that failed to reach trade deals by his August 1 deadline, including Canada, India and Taiwan. Partners that managed to secure trade deals include the European Union, South Korea, Japan and Great Britain. 'We think the resolution of trade deals to the satisfaction of the market – more or less, barring a few exceptions – has been the key driver for oil price bullishness in recent days, and further progress on trade talks with China in future could be a further confidence booster for the oil market,' said Suvro Sarkar at DBS Bank. Prices were also supported this week by Trump's threats to impose 100% secondary tariffs on Russian crude buyers as he seeks to pressure Russia into halting its war in Ukraine. Thishas stoked concern over potential disruption to oil trade flows and the removal of some oil from the market. JP Morgan analysts said on Thursday that Trump's threatened penalties on China and India over their purchases of Russian oil potentially put 2.75 million barrels per day (bpd) of Russian seaborne oil exports at risk. China and India are the world's second and third-largest crude consumers respectively.
Business Recorder
10 hours ago
- Business Recorder
UAE markets decline over profit booking and tariff tensions
United Arab Emirates markets declined on Friday, mirroring losses in global equities, after the U.S. slapped steep tariffs on dozens of trading partners, while investors await U.S. jobs data that could impact the Federal Reserve rate cut decision. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.8%, while Japan's Nikkei closed 0.7% lower. Late on Thursday, President Donald Trump signed an executive order imposing tariffs of 10% to 41% on U.S. imports from foreign countries, including 25% on goods from India, 20% from Taiwan, 19% from Thailand and 15% from South Korea. The Fed's decisions impact monetary policy in the Gulf, where most currencies, including the Saudi riyal, are pegged to the U.S. dollar. Dubai's main index dropped 0.8%, retreating for a second straight session, as investors booked profits after the index surpassed a 17-1/2-year high, with top lender Emirates NBD Bank falling 2.4% and toll operator Salik Company decreasing 1.1%. However, maritime and shipping company Gulf Navigation Holding surged 5.8% after it raised the foreign ownership limit to 100% from 49%. Abu Dhabi's benchmark index settled 0.5% lower, snapping a five-session winning streak after reaching its highest level in over two and a half years earlier in the week. Gulf stocks gain on earnings optimism, ahead of US Fed outlook The downturn was led by a 3.4% decline in Abu Dhabi Commercial Bank, the UAE's third-largest lender. Commercial Bank International also slumped 7.8% after reporting a 5% decrease in second-quarter profit to 42.6 million dirhams ($11.60 million). Nevertheless, losses in the index were partially capped by a 5.1% jump in IHC-owned investment firm Multiply Group as investors continued to buy dips after sluggish earnings last week. National Bank of Fujairah also climbed 9.6%, its biggest single-day gain since early February, following a 67% growth in its Q2 profit. Oil prices - a key catalyst for the Gulf's financial market - slipped 0.9% to $71.03 a barrel by 1136 GMT. Dubai and Abu Dhabi indices ended their five-week winning streaks with weekly declines of 0.6% and 0.2% respectively, but still posted strong monthly gains with Dubai clinching 8%, its highest in over four years, and Abu Dhabi climbed 4.2%, its highest in more than two years, according to LSEG data. --------------------------------- ABU DHABI down 0.5% to 10,317 DUBAI fell 0.8% to 6,112 ---------------------------------
