Tobacco bundles are ready for sale at a company’s selling points. —Photo by the writer
SWABI: Officials at tobacco companies have questioned the impact of multiple levies on the sector and raised concerns about the utilisation of funds meant for development in tobacco-growing districts.
They said tobacco was liable to three major taxes: the Federal Excise Duty (FED), collected by the Federal Board of Revenue; the Federal Tobacco Cess (FTC), collected by the Pakistan Tobacco Board; and the Tobacco Development Cess (TDC), collected by the Khyber Pakhtunkhwa government through the Excise Department.
Among these taxes, FED and TDC constitute the largest shares of the overall tax burden on the tobacco crop. FED is collected at the green leaf threshing stage and includes an advance payment component, known as advance FED, which currently stands at Rs390 per kilogram.
They said the FED rate had undergone several changes over the years. It was increased to Rs300 per kg in the 2018 mini-budget from Rs10 per kg, but the increase was later reversed during Finance Bill deliberations in June 2019.
