Pakistan: Sale of Smuggled Cigarettes at Petro-marts: Total Parco Signs Contracts with Two Multinational Companies

Source from:  (Karachi, Pakistan) Business Recorder (pk)  03/26/2013

Total Parco Pakistan Ltd has informed the Federal Board of Revenue (FBR) that it has signed contracts with two leading multinational cigarette manufacturing companies to offer support to them for effectively tackling sale of non-duty paid smuggled cigarettes at petro-marts.
 
Sources told Business Recorder here on Monday that the oil marketing companies are responding to the letters of the Directorate General of Intelligence and Investigation Inland Revenue on the sale of non-duty paid smuggled cigarettes at the petro-marts. Two leading OMCs have promptly responded to the queries of the directorate of intelligence IR. The agency had written letters to the OMCs on the 'immediate action against sale of smuggled cigarettes at petro-marts: Corporate social responsibility'.
 
The directorate of intelligence IR had written letters to the OMCs for immediate action against sale of smuggled cigarettes. According to the directorate's communication to the OMCs, Directorate General Intelligence and Investigation, Inland Revenue, (I&I-IR) is FBR's financial investigation arm and it oversees all inland duty/tax operations. The sale of smuggled/local NDP cigarette not only erodes state's writ but it also causes an annual loss of around Rs 10 billion to the national exchequer in the shape of non-payment of duties and taxes. The resultant situation adversely affects the tax compliant local cigarette industry as well, letter added.
 
The above said company has informed the FBR that it appreciate directorate's efforts in combating illegal sale of non-duty paid cigarettes in Pakistan. The company completely understands the impact of such practices as it has signed contracts with two leading tobacco players in Pakistan, Pakistan Tobacco Company (PTC) and Philip Morris Pakistan Ltd (PMPKL). As per the contracts, the company has offered its support to these companies in tackling the sale of smuggled/NDP cigarettes but just to add perspective to this, the company operates in a franchised model whereby all of its retail stations are operated by our franchisees/dealers. Although the company or its staff is not directly involved in operating these Petro-Marts, it takes several initiatives in collaboration with tobacco partners to educate retailers regarding this area and maintain standards in Petro-Marts.
 
The company is committed to assist FBR in eradicating smuggled/NDP cigarette brands and it would help if Anti-Illicit Tobacco/Cigarette Trade Cell can identify relevant Petro-Marts where such practice has been observed. In this manner the company can focus our efforts to get the desired results quickly. In any case, the company will take the necessary steps to inform its franchisees/dealers regarding directorate's observation and seek support from tobacco partners as well to control this practice, the company added.
 
Chevron Pakistan Limited has informed the FBR that the company has communicated directorate's letter to all of its Mart operators. The company will also start investigations on immediate basis to ensure compliance with rules & policies of government. According to the letters of Mart operators, the operators should ensure those only legal products (cigarettes) are sold at the Marts nation-wide. Selling illegal /smuggled cigarettes is a clear violation of government rules & policies. If any of the mart operators is found selling illegal / smuggled product (without health warning), immediate action will be taken which may result in the cancellation of the mart contract, it added. Enditem