Pakistan Tobacco Company (PTC) has said there is a shortage of more than 10.3 million tons of tobacco in the market due to which farmers are selling tobacco between Rs. 430 to Rs. 1,400 per kg as against Rs. 310.
In a media briefing at Akora Khattak, the representatives of PTC informed the cigarette factories had set a target of buying 8.5 million kilos of tobacco from the farmers, but only produced seven million as there is a shortage of 10.3 million tonnes of tobacco due to bad weather.
Due to a shortage of tobacco in the market, farmers are selling tobacco from Rs. 430 to Rs. 1,400 per kg despite the fact, the minimum price is Rs. 310, they added.
A representative said that there has been a sharp decline in Pakistan’s tobacco exports due to the increase in tobacco prices. The target of domestic tobacco exports for the current year was 42 million kilos.
The representative further said that cigarette factories allegedly involved in tax evasion are involved in increasing the prices of tobacco by 350 percent on an illegal basis. The process of tobacco purchase by cigarette factories involved in tax evasion should be made in accordance with the law.
He also said that due to the extraordinary increase in cigarette taxes in recent times, the market has been flooded with illegal and smuggled cigarettes, whose market share has increased to more than half.
He has increased the tax rate on the cigarette industry by 150 percent in the financial year 2022-23. Despite the increase in the tax rate, Rs. 175 billion was collected against the target of 240 billion rupees.
In response to a question, he said that the track and trace system has not yet been implemented in all cigarette factories. Track and trace systems should be implemented across the sector without discrimination.
Two factories in Azad Kashmir should also be activated in the track and trace system, they urged FBR.
One of them said that since the increase in taxes, there has been a record increase in the sale of smuggled cigarettes. If the illegal cigarette trade continues like this, it is estimated that legal cigarettes will be sold less and illegal cigarettes will be sold more in the next year.
He said that compared to June of last year, the production of cigarettes has decreased by 44 percent during June this year, which was compensated by illegal and smuggled cigarettes.
He further added that due to the imposition of a heavy tax on legal cigarettes, the market share has decreased from 53 percent to 50 percent in the last three months. While the market of illegal and smuggled cigarettes increased forty-seven percent to fifty and he fears that this rate is likely to increase further in the coming days.
According to PTC officials, 30 percent of young boys in Pakistan are suffering from cigarette smoking, while there is no idea about the number of female smokers. They said that women smokers are not allowed to be surveyed.
