Non-compliant brands of cigarette packs causing loss of Rs324bn

ISLAMABAD: Institute of Public Opinion Research (IPOR) has conducted a survey and found that out of total 264 brands of cigarette packs sold in the domestic market, 245 brands are non-compliant.

These non-compliant brands are not paying taxes into the national kitty and causing an estimated loss of Rs324 billion to national exchequer on an annual basis.The results of the IPOR survey shows that in the aftermath of a hike in the taxes on cigarettes by 200 percent, the consumption did not decrease; rather it shifted from tax-paying brands to tax evaded brands in bulk.

The survey also finds out that there are 58 percent brands selling at the retail stage without Track and Trace System (TTS) stamps and 42 percent are compliant brands. The smuggled cigarettes are increasing phenomena as 35 percent brands are smuggled brands and 65 percent are locally non duty paid cigarettes at point of sale.

Only 19 brands of three manufacturers belonging to Pakistan Tobacco Company, Philip Morris and Khyber Tobacco are selling above the Minimum Legal Price (MLP) of Rs162.25 per packet.Out of 79 local brands, 17 brands are selling without Track and Trace System (TTS) stamps and above the MLP while 62 brands are selling without TTS stamps and are being sold below the MLP. Out of 166 smuggled brands of cigarettes, 31 brands are being sold above the MLP while 135 brands are being sold below the MLP.

“Our survey results show that 58 percent brands selling in the market are non-compliant and causing estimated revenue losses of Rs324 billion to the national exchequer” Tariq Junaid CEO of IPOR stated while sharing the result of a survey conducted by them here on Tuesday.

The IPOR conducted a survey in selected 11 cities of the country from August to October 2024 and stated that approximately 80 billion sticks of cigarettes are sold out in the domestic market and Rs7.18 per stick is collected in the form of taxes.