‘19.5b cigarettes sold in Pakistan without tax every year’

LAHORE

The share of illicit cigarette consumption in Pakistan is more than 23 percent. This means that 19.5 billion cigarette sticks are sold without the payment of duty and tax every year.

These views were expressed by the speakers at a seminar on illicit cigarette trade for district officials attended by police officials as well as district administration officials. The speakers informed the officials that the government exchequer loses more than Rs24 billion in duties and taxes. It was highlighted that the legal industry which had 76.3 percent share of the market pay more than 99 percent of the taxes whereas the illicit segment which has 23.7 percent share pays less than one percent. The main reasons cited for this illicit trade incidence in Pakistan include increasing tax-led price differential, weak enforcement, porous borders and lack of awareness.

The police and excise officials were also apprised of their powers to curtail illicit cigarette trade under the cigarette printing of warning Ordinance 1979 and its accompanying rules. As per the Ordinance, any cigarette pack which does not carry the government stipulated graphic and textual health warning is liable to be confiscated. Thus all smuggled cigarettes can; therefore, be confiscated under this law. The need for stronger enforcement was stressed by all participants. A recently published report titled "the challenge of illicit trade in cigarettes: Impact and solutions for Pakistan" was also shared with the participants.