Pakistan’s tobacco industry is raising concerns over the sector’s growing tax burden and the use of development funds collected from tobacco producers, arguing that multiple levies are increasing costs without delivering promised benefits to farming communities. Industry officials highlighted three major taxes — the Federal Excise Duty (FED), Federal Tobacco Cess (FTC), and Tobacco Development Cess (TDC) — noting that the advance FED on green leaf tobacco currently stands at Rs390 ($1.40) per kg, while the TDC in Khyber Pakhtunkhwa has risen from Rs6 per kilogram in 2023 to Rs27.5 ($0.02 to $0.10) per kg.
Although the TDC is legally earmarked for infrastructure, agricultural development, and farmer welfare in tobacco-growing districts, industry representatives say an estimated Rs6 billion ($18 million) collected over the past two years has produced little visible improvement, prompting calls for greater transparency and accountability in how the funds are allocated and spent.
