Pakistan’s tax authorities action against Philip Morris
Islamabad :- Pakistan’s tax authorities took action against Philip Morris Pakistan on violating taxation laws. In a crackdown operation on tax laws violations in tobacco sector, the Federal Board of Revenue (FBR), Government of Pakistan has seized a huge quantity of cigarette stock of Philip Morris, a leading multinational cigarette manufacturer.
According to details, FBR officials conducted the operation after it was discovered that the Philip Morris Pakistan had been selling cigarettes below the minimum retail price, which is a clear breach of tax regulations of Pakistan. FBR senior officials revealed that the tax authorities executed the operation against the cigarette manufacturer, which had been knowingly selling it’s cigarette brand i.e; Marlboro Advance at a price lower than the tax rate. In the crackdown operation, approximately 650 cartons of cigarette brand were confiscated.
Philip Morris Pakistan illegally set the retail price of newly launched Marlboro Advance lower than the established rate of Tier-1 Federal Excise Duty (FED), which increased the possibility of accusations of tax fraud.
According to Schedule 1 Item No. 9 of the Federal Excise Act of 2005, the Federal Excise Duty (FED) on Tier 1 cigarette packages is Rs330. The retail price listed for this brand, however, is less than the relevant FED, as is clear from the communication published by Philip Morris Pakistam in major newspapers.
The printed retail price of Marlboro Advance is not only less than the applicable duty, but also does not include any other fees, such as the cost of manufacturing and other applicable taxes, in accordance with section 12 of the Federal Excise Act of 2005. Given the aforementioned laws, government officials found that the stated retail price violates the minimum FED as specified by the law and that the cost of production has not been added to the retail price. This allegedly results in both FED tax evasion and sales tax avoidance because increased retail prices attract greater sales taxes, which are levied at an 18% rate.
The FBR confiscated approximately 650 cartons of cigarettes and investigation had been launched against Philip Morris authorities
Philip Morris International claims that the organization is working for a smoke free world. But Philip Morris in Pakistan is doing the opposite of the claim by launching new cigarette brands, attracting consumers by illegal discounts and violating marketing laws of Pakistan.
Recently different Pakistan’s media alsi highlighted tax laws violations by Philip Morris Pakistan.
Courtesy by The News, Profit by Pakistan Today,
https://www.thenews.com.pk/print/1099455-tobacco-firm-s-pricing-move-raises-tax-evasion-risk?s=08
