ISLAMABAD: In a move to curb tax evasion, the Prime Minister has ordered action on the situation regarding government officials who are engaged in facilitating tax evasion in the tobacco industry.
His orders come on the heels of the recent reporting of fake cigarette production at a factory sealed up last year in Jalalpur Pirwala, Multan.
Despite being sealed by the Federal Board of Revenue (FBR) last year, the factory continued to manufacture fake cigarettes, causing tax losses of crores of rupees.
According to reports, the owners of the factory are close to political powers in Khyber Pakhtunkhwa. On March 28, the police raided the factory and arrested two people, recovering a large amount of fake cigarettes.
However, the reports claim that the production of fake cigarettes continued even after the police raid.
The situation demonstrates the government’s inability to stop tax evasion in the tobacco industry, with sources more or less blaming political influence and corrupt department officials.
The FBR’s failure to collect taxes has resulted in huge amounts of tax revenue losses. The Prime Minister has directed officials engaging in tax evasion to be held to account. The PM’s directives are meant to increase transparency and accountability in the tax collection process.
If the government is to create tax revenue in the tobacco sector, it must work with provinces to put in place mechanisms for successful revenue collection. The PM’s directives suggest a coordinated effort to stop tax evasion and obtain compliance with the tax laws.
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