Muzaffarabad: Inland Revenue Enforcement Network a special task force of Federal Board of Revenue (FBR) has unearthed an illicit tax-evaded cigarette manufacturing scam in Azad Kashmir.
The prevalence of the illegal trade of tax-evaded cigarette making has recently been exposed by IREN, a subsidiary organization of the federal board of revenue when an inspection team of the IREN seized a truck loaded with huge quantity of low-priced tax evaded tobacco products being transferred from AJK into Pakistan. According to sources the tax evaded cigarette manufacturing units setup in Azad Kashmir have been producing huge quantity of low-priced cigarettes and other tobacco products in Pakistan. “These low-priced tobacco items are being supplied and sold in markets openly at cheap rates in Rawalpindi, Islamabad and other areas of the countryâ€, the source disclosed. The IREN has claimed to have enough evidence to prove that the retail price being charged is even lower than the amount of duty/taxes payable on the saleable packet of cigarette. “The sales tax laws enforced in Pakistan are also applicable in Azad Kashmir†the sources said adding that the sale of the tobacco items below the minimum price itself constitutes the evidence that no duty/tax has been paid on such supplies.
Meanwhile, the FBR has raised the issue with Taxation department officials of the government of Azad Kashmir seeking a prompt action to put an immediate end to this illicit trade of the tax-evaded cigarettes being manufactured by units located in the region.The Federal Board of Revenue has fixed minimum retail price of each cigarette pack being sold in market and according to sources selling cigarettes below the set cost is a flagrant violation of law. Sources said that the trucks laden with tax evaded cigarettes manufactured in AJK traveled to Pakistan without any check by the AJK tax authorities. The special task force of FBR has been repeatedly approaching the AJK tax authorities asking it to stop movement of low-priced cigarettes from AJK into Pakistan. The FBR officials have suggested the AJK tax authorities to constitute a representative team that could check and monitor as how these tobacco products being manufactured in AJK were being sold in open markets at cheap rates. The FBR has also asked the AJK tax authorities to provide a complete data of taxpayers including wholesale dealers, agents and taxpayers. A survey conducted by a non government think tank says that the illegal trade of cigarettes has been causing a loss of 40 billion rupees annually to the FBR. According to estimates Pakistan economy during the past five years suffered a loss of hundred billion rupees due to illegal tax evaded trade of cigarettes.
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