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ISLAMABAD, Mar 19 (APP): Fair Trade in Tobacco (FTT) while acknowledging the recent enforcement measures taken by the government against illicit cigarette manufacturers, has suggested stepping up ‘sporadic crackdowns’ to discourage elements involved in the illegal trade of tobacco products.
Speaking at a sensitization workshop on tax evasion in the cigarette industry, FTT Chairman Ameen Virk called on the government to take immediate and sustained action against tax-evading manufacturers while rationalizing the tax burden on legal cigarette companies,
He called for “sustained and aggressive enforcement of laws, including strict implementation of the Track and Trace System across all manufacturers and retail points, raids on factories and retailers selling cigarettes below the minimum legal price of Rs 162.25 per pack, reinforced border security to curb smuggling, and a transparent tax policy that prevents tax evasion from being incentivized.”
Virk warned that the illegal cigarette industry is more than just a tax evasion issue; “it is a direct attack on Pakistan’s economy.” Legal businesses operating within taxation and regulatory frameworks are being overburdened with excessive taxation, while illicit manufacturers continue to thrive with impunity.
He highlighted that “illegal cigarette brands now make up 56% of the total market, overtaking legal sales for years now.” Out of 413 cigarette brands in Pakistan, only 19 comply with the Federal Board of Revenue’s (FBR) Track and Trace System (TTS), a compliance rate of just 4.6%. “This blatant disregard for regulations is costing Pakistan billions in lost tax revenue,” Virk stated. “The government must take decisive action to bring illegal manufacturers under the tax net.”
He pointed out that while just two legal companies contributed nearly Rs300 billion in taxes, whereas around 40 illicit cigarette manufacturers, who controlled 56% of the market, paid only Rs. 5 billion.
Virk urged the government to focus on rationalizing tobacco taxation by reducing the excessive burden on tax-compliant companies to prevent further consumer migration to illegal brands, expanding the tax net to include non-compliant manufacturers instead of continuously targeting lawful businesses, and implementing a predictable and fair taxation policy that ensured stable revenue collection without destabilizing the market.
He reiterated that protecting tax-compliant businesses was not just about the survival of the legal cigarette industry; “it is about Pakistan’s broader economic stability.”