Cigarette production: CCP advises to lower criteria for tracking system’s introduction


ISLAMABAD, MAR 24 (DNA) – Amid painstakingly slow progress on the introduction of electronic monitoring system to curb over Rs50 billion annual tax evasions by cigarette manufacturers, the antitrust watchdog has advised the Federal Board of Revenue (FBR) to lower the qualification criteria for creating a level playing field.

In a policy note to the FBR, the Competition Commission of Pakistan (CCP) has asked tax authorities to review the request for proposal document that it issued to hire firms for installing a new trace and tracking system at cigarette production plants. The CCP believes that the FBR’s stringent criteria favour only one global party.

“A particular security printing firm having implemented the major track and trace systems in California, Turkey, Brazil, Kenya, Morocco, Albania and Georgia appears to be the only firm that meets the experience criteria mentioned,” according to the CCP note.

If FBR implements CCP’s recommendations, this will further delay introduction of the new system that remains pending for one year. The sources in the FBR said that some of CCP’s recommendations can be seriously considered, particularly on the annual turnover of the bidder.

The vested interests in FBR have been delaying introduction of the new system, which once implemented, will enhance the government’s tax revenues by at least Rs50 billion. The decision to introduce electronic monitoring of tobacco products through the stamp, track and trace system at manufacturing and supply-chain stages had been unanimously taken by the top FBR brass in March last year.

In May last year, the FBR had invited bids for the electronic monitoring of tobacco products. The bids were for supply, installation and operation of a system for five years. In response to FBR’s RFP, leading solution providers from Europe, the US and Australia offered their services. These were De La Rue – the UK, SICPA SA – Switzerland, Authentix – the UK, SURYS – Germany, Ashton Potter – USA, Opsec Security – USA and YPB Systems – Australia.