Illicit cigarettes supply chain: FBR to focus on enforcement at all stages

ISLAMABAD: The Federal Board of Revenue (FBR) will now focus on enforcement at all stages of the illicit supply chain to make cigarettes inaccessible to the youth.

Sharing details of the FBR’s enforcement plan, the FBR has identified major wholesale areas from where illicit cigarettes supplied to the shops and markets across Pakistan.

According to a representative of a leading tax paying multinational cigarette industry, fundamentally, the issue is that illicit trade stands at over 50% today. These are primarily locally manufactured tax evaded cigarettes which are selling at cheap prices because of no excise or taxes being paid to the government.

Increasing tax further despite a 200% increase in the last fiscal year will not yield the desired results, neither for the revenue targets nor the health agenda. To make cigarettes in accessible to the youth, enforcement is required at all stages of the illicit supply chain. Evading taxes has become financially lucrative and the penalties are negligible, which encourages local manufacturers to continue selling unchecked.

The illicit cigarette manufacturers do not pay taxes and have tried every trick in the book to circumvent the tax system.

Copyright Business Recorder, 2024