Pakistan's tobacco exporters urge competitive tax model, cite challenges for smaller firms
A delegation of leading tobacco exporters raised these concerns during a meeting with Federal Minister for Commerce Jam Kamal Khan on Monday, read a statement released by the commerce ministry on Tuesday.
During the meeting, exporters pointed out that the current tax structure—which includes a Federal Excise Duty (FED) of Rs390 per kg, Provincial Excise Duty (PED) of Rs50 per kg, Federal Tobacco Cess of Rs15.15 per kg, and a Provincial Development Cess of Rs25 per kg—totals Rs480.15 per kg.
'They said this cost poses a challenge, particularly for smaller exporters and suggested that a more competitive taxation model would help enhance Pakistan's position in the global tobacco market,' read the statement.
The exporters emphasised that tobacco, like other agricultural commodities such as sugarcane, cotton, and citrus, should be supported through market-based policies. They noted that annual price adjustments are mandatory under current regulations, which can affect competitiveness in export destinations.
Kamal acknowledged the concerns and reiterated the government's commitment to balanced and growth-oriented policies.
He remarked that optimal revenue generation comes not only from taxation but also from industrial expansion and boosting exports.
Tobacco revenue can increase by bringing illicit trade into tax net
Kamal noted that similar concerns have been raised by other sectors, such as beverages, regarding the impact of high taxation on consumer demand and revenue collection.
The tobacco exporters also called for the revival of the Pakistan Tobacco Board (PTB) to support coordinated efforts in export promotion and policy facilitation. In response, Kamal proposed the establishment of a Sectoral Council for Tobacco, similar to other existing sectoral councils, to provide a structured platform for industry dialogue and representation.
The minister further informed the delegation that a revenue policy committee has been made independent of the revenue collection mechanism—an important step toward more informed and consultative policymaking.
Meanwhile, exporters appreciated the government's ongoing efforts to promote trade and highlighted the significant contribution of the tobacco industry to employment, rural development, and export earnings. They shared that with targeted facilitation, tobacco exports have the potential to increase substantially, supporting national revenue goals.
Exporters appreciated Kamal and expressed confidence that with continued government support, the industry could significantly increase its export footprint, read the statement.
Pakistan's tobacco exports reached $158.35 million in the current fiscal year (July–April), with promising growth in markets such as Belgium, UAE, Greece, and the Philippines.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
8 hours ago
- Business Recorder
Gold subdued as trade optimism weighs, but soft dollar cap losses
Gold prices edged lower on Friday, as signs of progress in trade negotiations between the U.S. and its trading partners weighed on safe-haven demand, although an overall weaker dollar limited losses for bullion. Spot gold was down 0.1% at $3,363.91 per ounce, as of 0243 GMT. However, bullion has gained 0.4% so far this week. U.S. gold futures fell 0.2% to $3,365.50. 'Basically we are seeing some profit-taking from short-term bullish speculators due to the fact that we now start to see this trade-deal optimism in the market,' OANDA senior market analyst Kelvin Wong said. 'However, the dollar is in a weakening bias and on top of that, we still have the Fed rate cuts pretty much alive at this juncture, which are supporting gold near $3,360 level.' The European Union and the United States now appear to be heading towards a possible trade deal, according to EU diplomats, which would result in a broad 15% tariff on EU goods imported into the U.S., mirroring a framework agreement Washington struck with Japan. The S&P 500 and the Nasdaq notched record closing highs overnight as signs of easing global trade tensions lifted risk sentiment among investors. Offering respite to gold, the U.S. dollar index was headed for its worst week in a month, making greenback-priced gold less expensive for other currency holders. Data showed U.S. jobless claims unexpectedly fell last week, signalling a steady labour market despite sluggish hiring making it harder for the unemployed to find work. The Federal Reserve is also widely expected to leave rates unchanged at its July 29–30 meeting, but markets continue to price in a potential rate cut in September. Spot silver rose 0.2% at $39.14 per ounce and was on track for a weekly gain, up 2.5% for the week. Platinum eased 0.2% to $1,407.10 and palladium climbed 0.9% to $1,238.73.
Business Recorder
8 hours ago
- Business Recorder
Dollar heads for biggest weekly drop in a month as focus shifts to Fed, BOJ meets
SINGAPORE: The dollar steadied near two-week lows on Friday, on track for its biggest weekly drop in a month, as investors contended with U.S. tariff negotiations ahead of a deadline while looking ahead to central bank meetings next week for clues on policy. Both the U.S. Federal Reserve and the Bank of Japan are expected to hold rates at next week's policy meetings, but traders are focusing on the subsequent comments to gauge the timing of the next move. 'Next week's BOJ policy meeting will be closely watched for hints on the timing of the next rate hike,' said Carol Kong, currency strategist at Commonwealth Bank of Australia. The prospect of rate hikes by the BOJ had improved, she added, after a trade deal struck with the United States this week lowered tariffs to 15% on auto imports from Japan. The yen stood at 147.10 to the dollar, on course for a weekly gain of 1%, its strongest such performance since mid-May. Yen, euro lifted by progress on trade A majority of economists in a Reuters poll this week expect Japan's central bank to raise interest rates by 25 basis points this year. The dollar index , which measures the U.S. currency against six other units, was at 97.448, set for a drop of 1% this week, its weakest performance in a month. On Thursday, the European Central Bank left its policy rate at 2%, as expected, in a break from a year of policy easing, to await clarity over future U.S. trade ties after the European Commission said a negotiated solution was in reach ahead of the August 1 deadline. The euro was little changed at $1.1754 in early trade, but not far from $1.183, the near four-year high it touched at the start of the month. The euro is up 13.5% this year as tariff policies take the shine off the dollar. Progress on trade deals has also raised market hopes for talks with China, after U.S. Treasury Secretary Scott Bessent said officials of both countries would meet in Stockholm next week to discuss an extension of the deal negotiation deadline. The Australian dollar has been boosted by the rise in risk appetite after the trade deals and was last at $0.6593, hovering near an eight-month high touched on Thursday. Trump's FED visit Donald Trump locked horns on Thursday with Fed Chair Jerome Powell during a rare presidential visit to the central bank, criticising the cost of renovating two historical buildings at its headquarters and pressing the case for lower interest rates. Markets mostly shrugged off the visit, however, having become accustomed to Trump's repeated tirades against Powell and the Fed. 'Trump's Fed visit was spectacle over substance,' said Prashant Newnaha, senior Asia-Pacific rates strategist at TD Securities. 'The market's focus is firmly on next week's Fed meeting. We expect Powell to repeat a patient, data-dependent policy outlook with flexibility but (he) is unlikely to commit to cuts.' At their two-day rate-setting meet, the central bank's 19 policymakers are widely expected to leave their benchmark interest rate in the range of 4.25% to 4.50%. Traders are pricing in 43 basis points of rate cuts by the end of 2025. ANZ strategists expect the Fed to cut rates by 25 basis points in September and again in December. 'Were it not for tariff uncertainty, we judge that rate cuts would already have resumed,' they said in a note. 'The labour market is weakening, service price disinflation is well established, demand growth has slowed and there is no discernible evidence that higher tariffs are spilling into a broader inflation problem.' In cryptocurrencies, bitcoin eased 0.79% to $117,840, while Ethereum was 2% lower at $3,655.
Business Recorder
a day ago
- Business Recorder
Trump to visit Federal Reserve on Thursday, White House says
WASHINGTON: US President Donald Trump, a strong critic of Federal Reserve Chair Jerome Powell, will visit the central bank on Thursday, the White House said. Trump has lambasted Powell repeatedly for not cutting U.S. interest rates more aggressively, referring to him as a 'numbskull' on Tuesday and musing publicly about firing him. The White House said on Wednesday in a schedule it released to the media that Trump would visit the Federal Reserve at 4:00 p.m. ET (2000 GMT) on Thursday. The schedule did not say whether Trump would be meeting with Powell. Trump says Fed's Powell will be out in 8 months, calls him a 'numbskull' A Federal Reserve official did not immediately respond to a request for comment. White House deputy chief of staff James Blair said earlier this week that administration officials would be visiting the Fed on Thursday but did not say the president would join. Trump's visit represents an acceleration of the pressure he and his advisers have put on Powell and the bank, traditionally viewed as an independent institution.
