ISLAMABAD - The government is working on International Monetary Fund’s demand to ensure the system to electronically monitor the production and supply of cigarettes.
Chairman Federal Board of Revenue (FBR) Shabbar Zaidi has summoned a meeting of all tobacco manufacturers on September 12 2019 in order to have their views for installation of Track and Trace system for tobacco products.
The IMF had asked the government to ensure that the system to electronically monitor the production and supply of cigarettes and other products of tobacco is completely operational by March 2020. The IMF had directed the relevant departments that to meet this deadline, the bidding process should be completed by September 2019 and successful bidding company should be issued the license to implement this Track & Trace System. The IMF had also asked the government to withdraw the legal provisions aimed at limiting the tax audit.
In structural benchmarks, the government had committed with the IMF that it would issue licenses for the track-and-trace system for excises on cigarettes by end September 2019 and implement the system by end-March 2020.The FBR had estimated collection of Rs150 billion from cigarettes industry during the current fiscal year 2019-20 against collection of Rs110 billion in the last fiscal year 2018-19.
FBR’s Member Inland Revenue (IR) Policy Dr Hamid Ateeq Sarwar in last week said that FBR will collect taxes worth Rs150 billion including Rs140 billion from two major tobacco companies and Rs10 billion from illicit tobacco as we have decided to install track and trace system to jack up our revenue collection. The FBR had collected Rs90 billion as Federal Excise Duty (FED) and Rs20 billion in shape of General Sales Tax (GST) in 2018-19, the Member said in a policy dialogue organised by Social Policy and Development Center (SPDC).