NAB to Investigate Tax Evasion in Cigarette Industry Worth Rs. 60 Billion

The Regional Board of National Accountability Bureau (NAB) Rawalpindi has notified the NAB headquarters about the tax evasion of Rs. 60 million by the cigarette industry. Reportedly, the board reviewed the case in its meeting and concluded that the matter should come under NAB’s investigation as the volume of tax evasion was quite high. The Auditor General of Pakistan (AGP) said that the cigarette industry was responsible for the tax evasion amounting Rs. 33 billion. Moreover, the government had just removed six members of the Federal Board of Revenue (FBR) liable for the revenue loss. The FBR failed to meet its revenue target from the cigarette industry owing to the introduction of the third slab of federal excise duty (FED), incurring a Rs. 60 billion loss to the national exchequer over the period of three years. Notably, the cigarette industry is a major contributor to the national exchequer. ALSO READ Despite Billions in Sales Local Cigarette Manufacturers Contribute Only 2% to Excise Revenues The FBR chairman has apprised the special committee regarding the decrease in the industry’s tax payments. He said that the board is taking action and removing members is a part of it. It is pertinent to mention here that the Public Accounts Committee (PAC) had recommended the AGP to conduct a special audit of a huge decline in tax collection from the cigarette industry. The AGP found that one of the multinational companies was including its popular brands in the lowest tax tier, which increased its sales and decreased its tax payments by 50 percent. Notably, the introduction of the third tax slab has decreased the federal excise duty on cigarettes from Rs. 33 to Rs. 16 per pack. While the revenue of cigarette manufacturing companies increased by up to 118 percent, FBR’s revenue collection could only reach Rs.87 billion against the target of Rs.120 billion. Via: Tribune