Pakistan Tobacco Board Appeals Against Dissolution

The Pakistan Tobacco Board has formally appealed to Finance Minister Senator Muhammad Aurangzeb to reconsider the federal cabinet’s decision to dissolve the board and transfer its responsibilities to provincial authorities.

In a letter to the Finance Minister, officials from the Pakistan Tobacco Board described the decision as unconstitutional and illegal, asserting that it breaches legal provisions. Established under the Pakistan Tobacco Board Ordinance of 1968, the organization functions as a self-sustaining federal entity, promoting the cultivation, production, and export of tobacco products.

The officials argued that tobacco has traditionally been managed at the federal level due to its significant role in trade, finance, and industry. They cautioned that transferring these responsibilities to provincial authorities without enacting new legislation could lead to conflicts over tobacco cultivation, production, export policies, taxation, and pricing.

Citing international practices in countries like China, India, and Zimbabwe, where tobacco is treated as a federal subject due to its economic importance, the officials emphasized Pakistan’s rising tobacco exports. Between 2019-2020 and December 2024, exports grew from $42 million to $108 million.

The Pakistan Tobacco Board also noted the substantial revenue generated by the sector, with the Federal Board of Revenue collecting over Rs. 237 billion in excise duties and sales tax this fiscal year. The board itself is projected to remit up to Rs. 600 million in taxes for FY 2024-2025.

A 2012 clarification from the Law and Justice Division reaffirmed that the Pakistan Tobacco Board Ordinance falls under the federal legislative domain as per the Constitution. The board warned that devolving tobacco-related functions could disrupt tax collection and regulatory frameworks.

In view of these factors, the board urged the High Powered Rightsizing Committee to reconsider its decision, arguing that retaining the Pakistan Tobacco Board serves the greater interests of the nation.