Illicit cigarette trade costs Rs300b annually

Effective control over tax evasion in the tobacco sector can significantly reduce the revenue deficit and enable the government to better withstand internal and external economic pressures. The evolving situation in the Middle East, coupled with the failure to meet tax targets, is putting a serious strain on Pakistan's fiscal balance. On the one hand, the government is cutting development funds to provide fuel relief to the public and on the other, a shortfall of Rs185 billion in the March tax target is widening the budget deficit. To bridge this gap, the IMF is pushing for the withdrawal of tax exemptions, a move expected to increase the cost of doing business. The Federal Board of Revenue (FBR) had been assigned a target of Rs1,367 billion for March; however, collections fell short by Rs185 billion, reaching Rs1,182 billion. Last year, the FBR collected Rs1,116 billion in March, requir...