TAC demands tax burden ease for tobacco export

ISLAMABAD: Chairman of the Tobacco Action Committee (TAC) Khyber Pakhtunkhwa, Irshad Khan, Friday urged the federal government and the Federal Board of Revenue (FBR) to immediately address the serious challenges facing Pakistan’s tobacco sector, warning that the livelihoods of thousands of farmers and businesses could be at risk if corrective measures are not taken. Addressing an urgent press conference at the National Press Club Islamabad Friday alongside tobacco growers’ representatives, including Abdul Latif, Irshad Khan said that while exports are encouraged and facilitated worldwide, Pakistan has imposed heavy Federal Excise Duty (FED) and other restrictions on tobacco exports. He stated that exporters are required to pay approximately Rs390 per kilogram in excise duty and other taxes in advance, making exports nearly impossible for small and medium-sized businesses. He suggested that the government introduce alternative mechanisms such as bank guarantees or post-dated cheques, which could significantly boost exports and help the country earn valuable foreign exchange. Khan said that last year’s tobacco crop in Khyber Pakhtunkhwa remains unsold, while a new crop is about to enter the market. As a result, many disappointed farmers are being forced to destroy their produce, creating an alarming situation for the agricultural economy. He noted that districts including Mardan, Swabi, Charsadda, Buner and Mansehra are major tobacco-producing regions, where thousands of families depend on the crop for their livelihoods. Recent climate-related challenges, including heavy rains and storms, have further compounded farmers’ difficulties. The growers’ representatives alleged that several flaws exist in the policies and quota system of the Pakistan Tobacco Board. They claimed that some companies reduced their procurement contracts this year while failing to offer adequate increases in purchase prices, placing additional financial pressure on farmers. The representatives further stated that Pakistan exported tobacco to the United States and other countries for the first time last year, leading to increased demand for Pakistani tobacco in international markets. However, they argued that the current taxation and regulatory framework is hindering the sector’s growth. During the press conference, speakers said that all major political parties had supported resolving the issue during a recent All Parties Conference. According to participants, representatives of the Pakistan Muslim League-Nawaz (PML-N), Pakistan People’s Party (PPP), Pakistan Tehreek-e-Insaf (PTI), Awami National Party (ANP) and Jamaat-e-Islami assured stakeholders that they would engage with the federal government to seek a solution. The speakers emphasised the need for a joint mechanism comprising representatives of the government, FBR, Pakistan Tobacco Board, farmers and industry stakeholders to ensure a balanced approach to tax collection, exports and the protection of farmers’ interests. They warned that failure to address the issues promptly could result in severe economic hardships for thousands of farmers and businesses, while also negatively impacting the country’s exports and foreign exchange earnings. At the conclusion of the press conference, participants called on the government to recognise the tobacco industry as an important component of the national economy and to take immediate practical measures to restore the confidence of farmers, industrialists and exporters. Copyright Business Recorder, 2026

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