Get latest articles and stories on World at LatestLY. Experts said Pakistan has a strategic window to meet International Monetary Fund (IMF) conditions, boost tax collection, and notably increase the tax-to-GDP ratio by curbing illicit trade in the tobacco sector, The Express Tribune reported.
Lahore [Pakistan], March 24 (ANI): Experts said Pakistan has a strategic window to meet International Monetary Fund (IMF) conditions, boost tax collection, and notably increase the tax-to-GDP ratio by curbing illicit trade in the tobacco sector, The Express Tribune reported.
The IMF recently proposed that the Federal Board of Revenue (FBR) impose a uniform excise duty on all locally manufactured cigarettes, irrespective of the manufacturer’s origin, to generate additional revenue.
Also Read | Holi 2024: Pakistan Former Foreign Minister Bilawal Bhutto Wishes Hindu Community in Country on Occasion.
However, tax revenue from the tobacco sector predominantly originates from just two legal companies, as the FBR has completely failed to bring the illicit cigarette manufacturers into the tax net, as per The Express Tribune
With the potential to enhance annual revenue from the tobacco industry to Rs600 billion, up from the current Rs250 billion, cracking down on the illicit tobacco trade is seen as a crucial step. This move aligns with the government’s ambition to elevate the tax-to-GDP ratio to 20% and address Pakistan’s economic challenges more effectively.
Also Read | Yoozoo Games Executive Sentenced to Death For Poisoning Its Billionaire Founder Lin Qi.
“Curbing the illicit tobacco trade is not just about revenue; it is also about meeting IMF conditions and strengthening Pakistan’s economic resilience. This initiative can significantly contribute to enhancing tax collection and improving the tax-to-GDP ratio,” said Osama Siddiqui, a microeconomic analyst.
According to The Express Tribune, recent industry data reveals a surge in the market share of illicit cigarettes, now standing at 63 per cent, emphasising the pressing need for intervention. The widening gap, attributed to the higher prices of legal cigarettes, has propelled consumers towards more affordable, untaxed alternatives, leading to a staggering loss of Pakistani currency (PKR) 310 billion in tax revenue.
He added that addressing the illicit tobacco trade was not just a fiscal necessity but also a strategic move to fund infrastructure development, healthcare and education.
By taking decisive steps to combat this issue, Pakistan can pave the way for economic growth, meet international obligations and secure vital resources for national development.” (ANI)
(This is an unedited and auto-generated story from Syndicated News feed, LatestLY Staff may not have modified or edited the content body)
Categories: News
