The international community has already criticized the methodologies employed by these INGOs in various international journals
Islamabad: ACT Alliance Highlights Tax Discrepancies: Urges Balanced Tobacco Taxation. The ACT Alliance has noted grave concern about the activities of international non-governmental organizations (INGOs) operating within Pakistan without the necessary certifications and registrations. Despite lacking formal approval, these organizations collaborate with federal ministries and hold public advocacy events targeting legitimate industries, including international cigarette manufacturing companies.
The international community has already criticized the methodologies employed by these INGOs in various international journals. Despite this, it seems there is no adequate legal oversight of their activities in Pakistan. Operating under the radar, these organizations engage in advocacy that disproportionately targets legal businesses while seemingly ignoring the broader issues.
There is an ongoing discourse in Pakistan about increasing cigarette taxes. However, this discussion often lacks balance and fairness. There is little emphasis on the equitable and judicious application of taxes to those involved in illegal manufacturing, illicit trading, and tax evasion in the tobacco sector. These illicit activities result in significant financial losses to the national exchequer, estimated to be around Rs300 billion annually. This skewed narrative diverts attention from the pressing need to address tax evasion comprehensively.
To highlight the disparity, it should be noted that two international companies, holding a 42 percent market share, contributed Rs112 billion in taxes for the fiscal year 2022-23. In stark contrast, 38 local manufacturers, with a combined market share of 58 percent, paid a meager Rs2 billion during the same period. This glaring discrepancy underscores the need for a more balanced approach to tobacco taxation, where all players are held accountable.
The ACT Alliance is concerned that these INGOs, operating without express and required government registrations and No Objection Certificates (NOCs), may indirectly aid illicit traders and tax evaders. Focusing their advocacy efforts on legally compliant businesses potentially undermines the country’s economic growth prospects. This misdirection of efforts could be seen as indirectly supporting those who flout the law.
It is also noteworthy that influential individuals, including the former caretaker Information Minister, who are engaged by these INGOs, have rarely, if ever, advocated for the universal application of government tax laws. Instead, their focus remains on targeting legal cigarette manufacturers who already bear a significant tax burden, paying over 80 percent on each pack of cigarettes sold. This selective advocacy raises questions about the true motives behind their campaigns.
The ACT Alliance, committed to combating all forms of illicit trade, tax evasion, smuggling, and counterfeiting, views the approach of these INGOs with grave concern. As a local civil society alliance, we advocate for a fair and balanced application of laws that do not unfairly target compliant businesses but ensure that all market players, including those engaged in illegal activities, are held accountable.
Read More: Pakistan Presents Macro Framework to IMF, Targets Rs12 Trillion Tax Collection
We call upon the Government of Pakistan to scrutinize the activities of these INGOs operating within our borders without the necessary legal clearances. It is imperative to ensure that these organizations comply with Pakistani laws and do not exploit the lack of regulatory oversight to further agendas that could harm our economy. We urge the government to enforce the same strict standards on these INGOs applied to local organizations and businesses.
The ACT Alliance is committed to fostering a fair business environment in Pakistan. We believe that all stakeholders, including INGOs, must operate within the bounds of the law to ensure a level playing field. The government’s role in regulating and monitoring these activities is crucial to safeguarding the interests of Pakistan’s economy and its people.
ACT Alliance Highlights Tax Discrepancies: Urges Balanced Tobacco Taxation
Comments are closed, but trackbacks and pingbacks are open.