Tobacco Exporters Seek Policy Support In Meeting With Commerce Minister

ISLAMABAD, (UrduPoint / Pakistan Point News - 20th May, 2025) A delegation of leading tobacco exporters on Tuesday met with Federal Minister for Commerce Jam Kamal Khan on Monday to discuss ways to enhance Pakistan’s tobacco exports and address challenges related to tariffs and regulatory frameworks.

During the meeting, exporters appreciated the government’s ongoing efforts to promote trade and highlighted the significant contribution of the tobacco industry to employment, rural development, and export earnings,said a release issued here.

They shared that with targeted facilitation, tobacco exports have the potential to increase substantially, supporting national revenue goals.

Exporters pointed out that the current tax structure which includes a Federal Excise Duty (FED) of Rs. 390 per kg, Provincial Excise Duty (PED) of Rs. 50 per kg, Federal Tobacco Cess of Rs. 15.15 per kg, and a Provincial Development Cess of Rs. 25 per kg totals Rs. 480.15 per kg.

They said this cost poses a challenge particularly for smaller exporters and suggested that a more competitive taxation model would help enhance Pakistan’s position in the global tobacco market.

The exporters emphasized that tobacco, like other agricultural commodities such as sugarcane, cotton, and citrus, should be supported through market-based policies. They noted that annual price adjustments are mandatory under current regulations, which can affect competitiveness in export destinations.

Minister Jam Kamal Khan acknowledged the concerns raised and reiterated the government’s commitment to balanced and growth-oriented policies.

He remarked that optimal revenue generation comes not only from taxation but also from encouraging industry expansion and boosting exports.

He noted that similar concerns have also been raised by other sectors, such as beverages, regarding the impact of high taxation on consumer demand and revenue collection.

The exporters also called for the revival of the Pakistan Tobacco board (PTB) to support coordinated efforts in export promotion and policy facilitation.

In response, the Minister proposed the establishment of a Sectoral Council for Tobacco, similar to other existing sectoral councils, to provide a structured platform for industry dialogue and representation.

The Minister further informed the delegation that for the first time, the revenue policy committee has been made independent of the revenue collection mechanism—an important step toward more informed and consultative policymaking.

Exporters appreciated the positive response from the Minister and expressed confidence that with continued government support, the industry could significantly increase its export footprint.

Pakistan’s tobacco exports reached $ 158.35 million in the current fiscal year (July–April), with promising growth in markets such as Belgium, UAE, Greece, and the Philippines.

The meeting concluded with a mutual commitment to strengthening public-private cooperation for enhancing the country’s tobacco export potential and creating a more enabling environment for industry stakeholders.