FBR likely to introduce tax stamps on cigarette packs

FBR likely to introduce tax stamps on cigarette packs

KARACHI: The Federal Board of Revenue (FBR’s) likely initiative to introduce tax stamps on cigarette packs and other goods would not only help tightening noose around the unbridled non-tax paid cigarette trade it would also significantly improve revenue collection for the government.

In the context Pakistan where billions of rupees are annually lost to cigarette black market and other excisable commodities, the proposed printing of stamps on these goods comes as a significant move that would greatly help to eradicate the untaxed cigarette trade.

In this regard, it needs to be ensured that any foreign company is not involved for printing tax stamps on cigarette packs. This not only involves serious repercussions, it entails financial constraints as well.  The government should not allow the money spent on tax stamps to be handed over to some foreign company. The money of Pakistani tax payers should stay in Pakistan. The Security Printing Corporation of Pakistan and a host of other big printing houses, have sufficient technical knowledge to provide the tax stamp solution.

In Bangladesh that relied on an indigenous printing solution without seeking external help, the phenomenon of tax stamps on cigarette packs has been a thumping success.

In the year 2002, Bangladesh’s National Board of Revenue (NBR) introduced tax stamp and banderole system to combat tax evasion. On this count, the pertinent details suggest that vigilant monitoring of the ports of entry and domestic manufactures by the NBR was done diligently.  This was followed by an enormous anti-smuggling drive by the government.  As a result, illicit trade in cigarette was reduced from 20 per cent in 2000 to 1.2 per cent in 2009. Bangladesh’s reliance on its indigenous tax stamp system remained instrumental in drastically curtailing the illicit cigarette trade.

It also merits mention here that one of the well known foreign tax stamps solution providers has lately been in the media but for all the wrong reasons, Brazil's Federal Police has recently launched a crackdown on officials involved in corruption in collusion with the aid company in a mega tax stamps case.

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