KP assembly calls for tax on tobacco transport to other provinces

Members of the Khyber Pakhtunkhwa Assembly on Monday urged the provincial government to impose a tax on the transportation of locally produced tobacco to other regions where cigarette manufacturing takes place.

The demand was raised during a session chaired by Speaker Babar Saleem Swati, where lawmakers expressed concern that Khyber Pakhtunkhwa produces the majority of the country’s tobacco but receives limited economic benefit due to a lack of local manufacturing facilities.

Treasury member Abdul Karim Khan said the province produces around 98 per cent of flue-cured Virginia tobacco, yet most cigarette factories are located in Punjab and Azad Jammu and Kashmir. He argued that this deprives the province and its farmers of fair returns.

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Lawmakers highlighted that tobacco transported to tax-free zones allows companies to avoid contributing to the local economy, while unemployment in the province continues to rise. Abdul Karim warned that economic hardships were pushing youth towards crime and drug abuse, stressing the need for policy intervention.

Opposition member Ahmad Karim Kundi supported the proposal, stating that farmers were facing serious challenges and expected the government to take meaningful action. He emphasised that the issue required urgent discussion at all levels.

Responding to the concerns, Excise and Taxation Minister Syed Fakhr-i-Jahan acknowledged that the province benefits only from development cess, while federal excise duties are collected in regions where cigarette factories operate.

Speaker Swati directed the formation of a special committee to examine the issue in detail and propose solutions.

Separately, opposition lawmakers criticised delays in the Regi Town project, launched in 1991, which remains incomplete despite payments made by allottees decades ago.