Tazeen Akhtar | Islamabad
The biggest Cigarette Tobacco Scam of Pakistan in which sitting senators are involved is being investigated none other than the same Senate committee that is presided and consisted of the colleague members of the upper house of the Parliament. Moreover the same two senators are the member of the committee who are actually answerable for their captured truckloads of cigarettes that were non custom paid.
It is crystal clear that two Senators are involved in cigarette manufacturing and couple of weeks ago 11 trucks of cigarettes were checked on Motorway dispatched from Peshawar to Lahore having no custom clearance.
Senator Faisal Saleem and Senator Dilawar Khan were pointed out as the owners of the companies of the cigarettes while FBR was criticized for making it public through a press release.
Pakistan Tobacco Company PTC and FBR were in touch in this regard because PTC pursued FBR for not taking action against IPR theft by the local companies that are manufacturing fake brands of PTC. Now instead of conducting an inquiry in the right direction the senate committee has initiated investigation against PTC alongwith Philip Morris Pakistan.
The Sub-Committee of the Senate Standing Committee on Interior met on 10 Aug at Parliament House to review matters relating to smuggling of cigarettes. The meeting was chaired by Senator Saifullah Abro and attended by Senators Talha Mahmood, Dilwar Khan, Bilal Khan and Haji Hidayatullah Khan.
Today the matter of recovery of Rs. 1120 billion against the Consumption Certificates of tobacco industry remained under discussion during the meeting of Sub-Committee on Interior.
Questioning the leakage of Customs data to private Media outlets, the committee noted that leakage cannot be done without involvement of Customs officials. The committee questioned the conduct of media contrary to code of ethics.
FBR informed committee that investigation in leakage matter is also underway. The Convener Sub-Committee directed member FBR to take strict action against the officials involved in data leakage to media and submit report to the committee.
At the FBR, the head of media affairs is Ali Shehzad who was contacted by this scribe on the question of the leakage but he did not respond. Definitely, he is the main person to answer this question but he is not available , neither for media nor for the senate committee that clearly means the FBR highups are trying to save his skin.
The Convener Sub-Committee also questioned the non-submission of details of consumption certificates issued regarding goods imported for tax exempted areas. It was apprised that Peshawar High Court has ordered audit before issuance of consumption certificates and also barred Pakistan Customs to encash security cheques. However, the Convener urged FBR to challenge the PHC orders in Federal Constitutional Court and submit report.
The Sub-Committee of the Senate Standing Committee on Interior, while reviewing matters relating to tax-exempt industries, consumption certificates, alleged misuse of tax exemptions and corruption in relevant departments, directed the concerned authorities to furnish complete records and take strict action against irregularities.
The Chairperson questioned the authorities regarding the persons who had applied for consumption certificates and sought details of the cases pursued by the Department before the constitutional courts. He observed that, under the law, any person refusing to provide the required documents or information would be proceeded against accordingly.
The Federal Investigation Agency (FIA) informed the Sub-Committee that a team had been constituted to investigate the matter.
Senator Talha Mahmood emphasized that FIA could facilitate the issuance of consumption certificates if the matter was taken up seriously. He alleged that certain industrialists were operating two factories or more, one in a tax-exempt area and other in a settled area, and that certain Customs officials facilitated such practices.
Senator Talha Mahmood further recalled that Pakistan Customs had previously introduced tracking chips on containers to monitor their movement and verify whether they reached their declared destinations. He stressed the need for effective monitoring mechanisms to prevent misuse of tax exemptions and smuggling-related irregularities.
Senator Bilal expressed concern that Balochistan remained deprived of adequate industrial development. He also complained that legitimate commodities were sometimes treated as smuggled goods despite the borders of Balochistan being sealed.
The Chairperson directed that letters be issued to all factories operating in tax-exempt areas, requiring them to furnish details of imported material, material consumed, brand names and taxes paid during the last two years. It was informed that Pakistan Customs had issued consumption certificates amounting to Rs. 378 billion. The Chairperson further directed that bank and account details of the companies in whose names the certificates had been issued be furnished to the Sub-Committee.
The FBR representative stated that the Department had undertaken substantial measures to address the issue and strengthen mechanisms for countering such practices.
The Sub-Committee also examined allegations of corruption and theft involving officials. Three investigating officers namely Shahzaib Ali, Fakhar Gondal and Christopher allegedly involved in corruption was presented before the Sub-Committee. It was informed that 22 persons were allegedly involved in the theft incidents, of whom 11 had been apprehended.
The Sub-Committee further directed the concerned authorities to furnish details of assets beyond known means of the accused officials, along with forensic examination reports of their mobile phones. Senator Talha Mahmood recommended that the corruption case be taken up by the main Senate Standing Committee on Interior.
The Sub-Committee appreciated the submission of consumption data for the period 2018–2026 and directed the concerned departments to furnish the corresponding record for the period preceding 2018 as well.
The Sub-Committee was briefed on the consumption of major raw materials imported by tobacco companies. It was informed that approximately 20,002 metric tons of acetate tow had been imported, with 97 percent accounted for by two major companies and the remaining 3 percent by other companies.
Approximately 15,639 metric tons of tobacco paper had also been imported, including 10,840 metric tons by PTC, 3,118 metric tons by Philip Morris and the remaining quantity by other companies.
Regarding filter rods, the Sub-Committee was informed that approximately 533 metric tons had been imported, of which 96 percent was accounted for by two companies and 4 percent by other companies.
The briefing indicated that, in aggregate, PTC and Philip Morris accounted for approximately 94 percent of the imported material consumed, while local companies accounted for the remaining 6 percent. The Chairperson expressed concern that the concerned departments had been unable to provide complete and consolidated details to the Sub-Committee.
It was further briefed that PTC and Philip Morris did not fall within the jurisdiction of RTO Peshawar. PTC was under LTU Islamabad, while Philip Morris fell under LTU Karachi. The Sub-Committee directed the concerned RTOs/LTUs to furnish complete details of taxes collected and imported material relating to the companies.
The Sub-Committee was also informed that four illegal cigarette manufacturing companies operating in Khyber Pakhtunkhwa had recently been sealed. The Sub-Committee directed the authorities to submit complete details of all companies operating under the jurisdiction of RTO Peshawar.
The Convener directed the concerned authorities to furnish the formula used for calculating tax on cigarettes.
Senator Talha Mahmood recommended the formulation of business-friendly policies aimed at encouraging tax compliance while eliminating opportunities for bribery and corruption.
Officials of the National Highways and Motorway Police also attended the meeting.
The Convener pointed out a discrepancy in the figures presented before the Sub-Committee regarding persons apprehended in connection with the theft incidents. While one briefing indicated that 22 persons were involved, the Inspector General of the National Highways and Motorway Police reported that 11 persons had been apprehended. The Sub-Committee sought clarification regarding the discrepancy and directed the concerned authorities to provide an accurate and consolidated position.
The Sub-Committee expressed serious concern over the matter and directed that a letter be addressed to the Ministry of Communications regarding the allegedly misleading statement made before the Sub-Committee. The matter was also directed to be referred to the Privileges Committee.
The Sub-Committee reiterated that all relevant departments must ensure transparency, accountability and effective monitoring mechanisms to prevent misuse of tax exemptions, illegal imports, corruption and other irregular practices.
