Pakistan - govt revenue loss on account of tax evasion, smuggling and counterfeiting in cigarette industry..

November 27, 2010 - Government has faced a revenue loss of Rs 45 billion (524,781,341.11 USD) during the last six years on account of tax evasion, smuggling and counterfeiting in cigarette industry due to failure of government’s authorities in taking concrete steps. According to industrial data, government had to face a revenue loss of Rs 7.5 billion in the current year, Rs 6.5 billion in 2009, Rs 6 billion in 2008, Rs 5.59 billion in 2007, Rs 5.48 billion in 2006 and Rs 4.1 billion in 2005 on account of tax evasion. [1 USD = 85.7500 PKR]

On the other hand, due to counterfeiting in cigarette industry, the government had to bear a revenue loss of Rs 0.5 billion in the current fiscal year, Rs 1 billion in 2009, Rs 0.25 billion in 2008, Rs 0.24 billion in 2007, Rs 0.10 billion in 2006 and Rs 0.48 billion in 2005.

Due to smuggling, government had to swallow a bitter pill of revenue loss amounting to Rs 1.5 Billion in the current year, Rs 1.5 billion in 2009, Rs 1.22 billion in 2008, Rs 1.34 billion in 2007, Rs 1.22 billion in 2006 and Rs 1.4 billion in 2005.

Industry sources said that government has failed to take practical measures to halt tax evasion, counterfeiting and smuggling in cigarette industry, which is resulting in loss of billion of rupees to exchequer.

Reference: Tax evasion in cigarette industry reaches shocking levels, Pak Tribune, 11/25/2010.

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