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Business Recorder
21-05-2025
- Business
- Business Recorder
Tobacco exporters meet Jam Kamal
ISLAMABAD: A delegation of leading tobacco exporters met with Federal Minister for Commerce Jam Kamal Khan on Monday to discuss ways to enhance Pakistan's tobacco exports and address challenges related to tariffs and regulatory frameworks. During the meeting, 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 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. The exporters emphasized 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. Minister Jam Kamal Khan acknowledged the concerns raised 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 encouraging industry expansion and boosting exports. He noted that similar concerns have also been raised by other sectors, such as beverages, regarding the impact of high taxation on consumer demand and revenue collection. The exporters also called for the revival of the Pakistan Tobacco Board (PTB) to support coordinated efforts in export promotion and policy facilitation. In response, the Minister 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. Copyright Business Recorder, 2025
Business Recorder
20-05-2025
- Business
- Business Recorder
Pakistan's tobacco exporters urge competitive tax model, cite challenges for smaller firms
Pakistan tobacco exporters have warned that the current tax structure 'poses a challenge', especially for smaller players, and urged the government to adopt a more competitive taxation model. 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.
Express Tribune
05-05-2025
- Business
- Express Tribune
Power dues adjustment via NFC
The Power Minister said that the circular debt was also almost stagnant due to the better performance. He said that compared to the estimates of adding Rs411 billion in the flow of the circular debt, there were only Rs2 billion additions during the first nine months of this fiscal year. The total circular debt stood a little under Rs2.4 trillion. PHOTO: REUTERS The federal government on Monday reviewed the possibility of adjusting provincial reconciled outstanding electricity bills' dues against their shares under the National Finance Commission award, after limiting power sector losses to Rs221 billion, down by 40%. The Power Division shared the performance of the power distribution companies with the Economic Coordination Committee (ECC) of the Cabinet, which showed a mixed result in reducing losses and improving collection of the bills. Where there was still some increase in distribution losses, the recoveries did improve during July-March period of this fiscal year, showed the official record shared with the ECC. The ECC instructed the Power Division to further improve the fiscal position of these companies, as both the losses and recoveries were still in breach of the targets given by the power sector regulator; the National Electric Power Regulatory Authority (Nepra). Compared to the estimates of adding Rs390 billion in the power sectors losses during July-March period, the increase was 221 billion, said Sardar Awais Laghari, the Federal Minister for Power while talking to The Express Tribune. The Minister added that even compared to the same period of the last fiscal year, the losses were Rs143 billion, or 40% less. This showed that the boards of these distribution companies were on track to achieve their targets, except for Hyderabad and Sukkur, said the Power Minister. Last year, the government had replaced the boards of the power distribution companies but did not touch Hyderabad and Sukkur boards due to an understanding reached with the Pakistan Peoples Party. The Minister said that after improving recoveries from the private sector, his ministry has now sought the Finance Ministry's help in recovering outstanding dues from federal and provincial governments. In December, the federal government had asked all four provincial governments to clear their electricity bills amounting to Rs150 billion to avoid power cuts and financial losses to the national economy. Sindh tops the list with payables totalling Rs59.7 billion as of September last year, followed by Balochistan's Rs39.6 billion and Punjab's Rs38 billion, while Khyber Pakhtunkhwa has the lowest electricity payables amounting to Rs8.9 billion. A Finance Ministry official said that there was a mechanism available to adjust only those dues, which are reconciled and confirmed by the provincial governments. These payments are adjusted against the NFC dues but only when these are confirmed by the provinces, he added. According to the information shared with the ECC, compared to 15.14% losses during the first nine months of the last year, the figure slightly jumped to 15.7% this March. The reason behind the increase was the poor performance of Quetta, Sukkur, Hyderabad, Gujranwala and Lahore. The Faisalabad, Islamabad, Multan, Peshawar and Tribal districts companies reduced their losses compared to the last year. The bills' recoveries improved from 92% to 93.8% this March because of better performance of all companies except tribal districts, Hyderabad and Sukkur firms. The Power Minister said that the circular debt was also almost stagnant due to the better performance. He said that compared to the estimates of adding Rs411 billion in the flow of the circular debt, there were only Rs2 billion additions during the first nine months of this fiscal year. The total circular debt stood a little under Rs2.4 trillion. Among other decisions, the ECC took up a summary submitted by the Petroleum Division for extension in the validity period of sovereign guarantees issued against running finance facilities of Rs50 billion obtained from banks for LNG payments by the Sui Northern Gas Pipelines Limited (SNGPL). The Committee discussed the matter and approved extension up to June 2026 of the said sovereign guarantees, on the basis of improved cash flows of the company, according to the Finance Ministry. The ECC also considered a summary by the Power Division regarding the solarisation of 27,000 agriculture tube-wells in Balochistan, as decided by the Prime Minister on 2nd July 2024, at an estimated cost of Rs55 billion. The 70% subsidy has to be borne by the federal government. The ECC was told that an amount of Rs14 billion has already been released by the federal government while the remaining Rs24.5 billion was approved on Monday. Furthermore, the ECC further instructed the Power Division to closely monitor implementation of key components of the project, particularly the disconnection of tube-wells from the grid and removal of transformers and fixtures for every batch of feeders, as agreed under the project. The ECC also directed the Power Division to report back the progress on this account to ECC, in July.
