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ISLAMABAD, Jul 23 (APP):Pakistan Tobacco Company Limited (PTC) Wednesday reiterated its commitment to support farmers, ensure transparency in the tobacco leaf buying process, and strengthen the fight against illicit trade through robust compliance with regulatory frameworks.
While briefing journalists during visit to tobacco leaf buying areas, head of Leaf PTC Imad Ud din said that PTC directly contracts with more than 10,000 farmers, and through almost 150 technical experts, provides technical training and agronomic support from seed sowing to harvest, ensuring responsible sourcing and quality enhancement.
PTC also provides financial assistance to farmers in terms of loans. Recently PTC provided more than Rs 1 billion in terms of financial assistance to tobacco farmers in the region. Under this model, contracted farmers receive priority during buying, guaranteeing income security and promoting compliance with both local and international standards.
“Tobacco is called as a cash crop and directly manage more than $ 65 million economic activity and our commitment to farmers goes beyond procurement—we invest in their training, ensure guaranteed purchase of quality leaf, and create a sustainable livelihood model. Farmers remain at the heart of our business,” Imad Ud din added.
Addressing misconceptions around the Advance Federal Excise Duty (FED) imposed by the federal government at Green Leaf Threshing (GLT) units, PTC clarified that this levy, currently set at Rs 390 per kilogram, is borne entirely by manufacturers and does not affect farmers in any way. “The narrative that the advance FED hurts farmers is misleading and deliberately propagated by illicit trade operators to undermine tax enforcement,” the PTC official added.
“Farmers sell their green leaf to manufacturers; any tax applied after this point is strictly the manufacturer’s responsibility.” There are only around 13 GLTs in Pakistan, all fully traceable, making them the most logical taxation choke point.
In contrast, there are over 450,000 retail outlets selling cigarettes and more than 50 cigarette factories – primarily in Khyber Pakhtunkhwa (KPK) and Azad Jammu & Kashmir (AJK) – where enforcement at post-processing levels is far more challenging.
The FED at GLTs, fully traceable processing units—is a key tax enforcement mechanism designed to curb revenue leakage and illicit cigarette manufacturing.
By documenting actual volumes processed by manufacturers, the system ensures declared production aligns with tax liabilities, strengthening the national economy. Unprecedented excise increase in recent years on the legitimate cigarette manufacturing companies and too low advance FED in previous years has led to the illicit sector to grow to more than 56% of the market. This increase has been fueled by smuggled cigarette brands.
He urged FBR to analyze how much tobacco was processed at GLTs and how much adjustable FED was collected from cigarette manufacturers and how much of this adjustable FED was actually adjusted against the final liability.
In addition, it should also check how the GLT processing corresponds with the leaf buying of these manufacturers.
The tobacco industry is operating under the oversight of the Pakistan Tobacco Board (PTB) and is regulated by the PTB Ordinance, 1968, which governs production targets, procurement quotas, and fair market practices.