The government’s unexpected rise in the federal excise duty (FED) on cigarettes has sent tobacco producers into a tailspin.
The doubling of legal cigarette pricing has resulted in an increase in the consumption of illicit cigarette brands across the country, resulting in a dramatic decrease in sales for the regulated cigarette business.
Anjuman-i-Kahstkaran (KP) President Mushfiq Ali Khan voiced concern about the severe situation facing tobacco farmers, who are currently fighting to gain higher pricing for their products due to a considerable decline in legal industry sales.
Khan claimed that on March 28, 2023, a press conference was conducted to shed light on the rising issues faced by tobacco farmers as a result of the exceptional increase in the federal excise charge on cigarettes. During the summit, urgent calls were made to the government for quick help to protect tobacco growers’ interests.
Despite the fact that the press conference was two months ago, no top government officials or agencies have reached out to tobacco farmers or taken any action to alleviate the issue.
He went on to explain how high tariffs and a significant drop in sales had forced the regulated business to curtail their cigarette purchasing.
The clandestine cigarette manufacturing industry, on the other hand, pays farmers unfair prices for their tobacco with no promise of prompt payment. Faced with this situation, farmers have no choice except to rely on the illegal cigarette industry.
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He emphasised that tobacco farming is an important cash crop in KPK, sustaining the livelihoods of thousands of families.
The regulated, tax-paying business is critical to improving tobacco farming quality and ensuring farmers receive fast and equal reimbursement.
The enormous increase in federal excise tax imposed on the regulated business has only exacerbated tobacco producers’ difficulties.
Khan urged the government to lower the federal excise duty on cigarettes, allowing the regulated and lawful industry to resume purchasing from tobacco farmers, ensuring timely payments, and protecting farmers’ livelihoods, while also bringing the illegal cigarette industry under the law. This would help the government meet its cigarette tax targets more effectively.
Mushfiq Khan sent a clear message to the government and authorities that if tobacco farmers’ interests are not protected through cigarette tax reductions, they will not hesitate to take all necessary actions to protect their interests.
