ISLAMABAD: The documented tobacco companies have appreciated government’s efforts to clampdown on the illegal tobacco sector, leading to confiscation and destruction of cigarettes and raw materials for nearly 17 billion sticks in 2025.
During a media briefing here on Thursday, officials of the Pakistan Tobacco Company stated that this enforcement must be sustained, as illicit sector has increased to an unprecedented level.
Officials shared that the modus operandi of illicit manufacturers has changed to undeclared micro sites across Pakistan which are located on farms to rice mills and to the extent of establishing underground production facilities.
The authorities must regulate the complete supply chains of this sector holistically. From raw material controls, manufacturing oversight, track and trace, logistics and distribution, stronger border controls, robust prosecution and legal action against the illicit traders and retail enforcement.
During the briefing session, Hamza Khan Regulatory Engagement Manager PTC shared how excise revenues have increased in nominal terms but in real terms, adjusting economic figures for inflation to show their true purchasing power over time to reveal actual growth, the collection is worse off than a decade ago. This is because of downtrading from higher price legitimate brands to illegal cheaper brands which has largely been fuelled by the unprecedented excise increase in FY 2022 – 23.
Speaking further on other documentation measures by the Government, the officials shared that the FED imposition on Acetate Tow, a key input for manufacturing cigarettes, has led to it becoming the most lucrative product to smuggle across Pakistan.
The government in the past year seized more than 500 tonnes of acetate tow, showing the negative impact of high taxation.
Copyright Business Recorder, 2025
Comments
Comments are closed for this article.