ISLAMABAD: A report published by IPSOS, an esteemed international surveying organization, has brought alarming issues in Pakistan’s tobacco industry to light, revealing that the country is facing Rs300 billion in loss from illicit cigarette trade annually.
Mubashir Akram, the National Convenor of ACT Alliance Pakistan, commented on the report’s finding and said that unbalanced tax policies in Pakistan have particularly increased opportunities for tax evasion among local cigarette manufacturers, causing major economic damage.
He stressed the need to formulate tax policies, considering the ground realities and the current enforcement system of the Federal Board of Revenue (FBR).
He emphasized the importance of equipping the Inland Revenue Enforcement Network with operational facilities to enable rapid action against those involved in tax evasion based on intelligence information.
The report paints a stark picture, revealing that a staggering 91 cigarette brands in the country are sold below the government’s set minimum price of Rs127.44 or blatantly violating the Track and Trace System’s (TTS) implementation. These illegally manufactured and unlawfully sold brands are causing an annual loss of Rs300 billion to the national treasury.
Cigarette Smuggling into Pakistan
The survey found that not only are these 91 brands being sold illegally below the set rate and without the official Track and Trace System stickers. The survey also revealed that 74 cigarette brands are smuggled into the country and are openly sold in all major and minor cities across Pakistan, including the Islamabad Capital Territory.
According to IPSOS, about 2.5 billion cigarette packets are sold illegally in the country each year without TTS stickers, yet law enforcement agencies seem unable to halt this ongoing tax evasion.
IPSOS released this report after surveying over a thousand retail outlets across all provinces in the country. It underlined that cigarette brands are not only manufactured illegally but also supplied in the market in 25-30-cigarette packets, a practice that is illegal but continues unabated.
