The extraordinary increase in the federal excise duty (FED) on cigarettes imposed by the government has plunged tobacco farmers into a severe crisis.
The doubling in prices of legal cigarettes has sparked a surge in the consumption of illicit cigarette brands nationwide, leading to a sharp decline in sales for the regulated cigarette industry.
Mushfiq Ali Khan, President of Anjuman-i-Kahstkaran (KP), expressed concerns about the dire situation faced by tobacco farmers, who are now struggling to secure better prices for their crops due to the significant drop in sales of the legal industry.
Khan revealed that a press conference was held on March 28, 2023, to shed light on the mounting challenges encountered by tobacco farmers resulting from the extraordinary increase in the federal excise duty on cigarettes. During the conference, urgent appeals were made to the government for immediate assistance to safeguard the interests of tobacco farmers.
Despite two months passing since the press conference, no senior government officials or authorities have reached out to tobacco farmers or taken any steps to mitigate this crisis.
He elaborated on how burdensome taxes and a considerable decline in sales have compelled the regulated industry to limit their tobacco purchases.
In contrast, the illicit cigarette manufacturing industry offers farmers unfair prices for their tobacco, with no guarantee of timely payment. Faced with this predicament, farmers are left with no choice but to rely on the illegal cigarette industry.
He emphasized that tobacco is an important cash crop in KPK, supporting the livelihoods of thousands of families dependent on tobacco cultivation.
The regulated, tax-paying industry plays a crucial role in enhancing the quality of tobacco farming and ensuring prompt and equitable compensation for farmers.
The unprecedented increase in the federal excise duty imposed on the regulated industry has only further aggravated the challenges faced by tobacco farmers.
Khan called upon the government to reduce the federal excise duty on cigarettes, enabling the regulated and lawful industry to resume purchasing from tobacco farmers, ensuring timely payments, and safeguarding farmers’ livelihoods while also bringing the illegal cigarette industry under the purview of the law. This would provide better aid to the government in achieving its cigarette tax targets.
Mushfiq Khan conveyed a clear message to the government and authorities that if tobacco farmers are not safeguarded through a reduction in cigarette taxes, they will not hesitate to take any necessary measures to protect their interests.