LAHORE: Cigarette retailers in Pakistan are requesting the government to reverse the latest tax hike to avoid job losses in the industry.
The All-Pakistan Central Union Pan-Cigarette Beverage Retailers has called the increase in the Federal Excise Duty (FED) rate on cigarettes a threat to the survival of pan-cigarette retailers.
They have written a letter to Prime Minister Shehbaz Sharif to take notice of the matter and find a solution to the serious effects on retailers due to the high cost of legal cigarettes.
In the letter, the union president highlights the difficulties faced by retailers due to the increase in legal cigarette prices after the FED hike. The taxes imposed on the cigarette industry through the mini-budget in February 15 amount to Rs 60 billion.
The tax rate on cigarettes was increased from 200 percent to 400 percent, which doubled the price of cigarettes. However, consumers did not accept the increase, and the trend of smoking has not declined. Due to inflation and a reduction in purchasing power, consumers are increasingly attracted to cheap illegal cigarettes.
The sales of big brands are decreasing after the increase in FED, making it impossible to meet the tax collection targets from the cigarette industry. The increase in federal excise duty has almost doubled the price of legal cigarettes, causing consumers to switch to cheaper cigarettes, which are mostly illegal due to tax evasion.
This situation is difficult for retailers who sell illegal cigarettes to maintain their revenue, making the retailers guilty of breaking the law.
More than 7 lakh retailers selling pan-cigarettes across the country have faced a crisis due to the extraordinary increase in federal excise duty on cigarettes, which is likely to affect the livelihood of 5 lakh people.
The All Pakistan Central Union Pan-Cigarette Beverage Retailers has appealed to Prime Minister Shehbaz Sharif to take immediate notice of this situation and convene a meeting of stakeholders to prevent job losses and ensure that the families of 7 lakh retailers are not affected by possible starvation.
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