BR100 Increased By (0.01%)
BR30 Increased By (0.53%)
KSE100 Increased By (0.28%)
KSE30 Increased By (0.29%)
AGHA 6.38 Increased By ▲ 0.06 (0.95%)
BECO 4.35 Increased By ▲ 0.08 (1.87%)
BML 62.55 Increased By ▲ 0.10 (0.16%)
BOP 31.39 Increased By ▲ 0.16 (0.51%)
CNERGY 11.73 Increased By ▲ 0.14 (1.21%)
CSIL 5.91 Increased By ▲ 0.19 (3.32%)
FCCL 61.71 Increased By ▲ 0.17 (0.28%)
FFL 14.79 Decreased By ▼ -0.23 (-1.53%)
FNEL 1.24 Increased By ▲ 0.01 (0.81%)
KEL 6.32 Increased By ▲ 0.06 (0.96%)
KOSM 5.90 Increased By ▲ 0.34 (6.12%)
LOTCHEM 24.69 Increased By ▲ 0.01 (0.04%)
MLCF 103.93 Decreased By ▼ -0.15 (-0.14%)
NBP 173.32 Decreased By ▼ -1.96 (-1.12%)
NCPL 51.83 Decreased By ▼ -0.94 (-1.78%)
NPL 54.03 Decreased By ▼ -0.09 (-0.17%)
OGDC 315.87 Increased By ▲ 2.48 (0.79%)
PACE 9.26 Increased By ▲ 0.06 (0.65%)
PAEL 35.58 Decreased By ▼ -0.22 (-0.61%)
PIBTL 13.66 Increased By ▲ 0.19 (1.41%)
PPL 226.07 Increased By ▲ 4.26 (1.92%)
PRL 80.28 Increased By ▲ 1.20 (1.52%)
PTC 46.64 Decreased By ▼ -0.21 (-0.45%)
SSGC 23.82 Decreased By ▼ -0.05 (-0.21%)
TBL 9.24 Decreased By ▼ -0.07 (-0.75%)
TELE 7.55 Increased By ▲ 0.16 (2.17%)
TPL 24.54 Decreased By ▼ -0.57 (-2.27%)
TPLP 12.99 Increased By ▲ 0.48 (3.84%)
TREET 25.98 Decreased By ▼ -0.27 (-1.03%)
TRG 53.33 Decreased By ▼ -0.11 (-0.21%)

LAHORE: The rise of illicit cigarette manufacturing and sales has emerged as one of Pakistan’s most serious revenue collection and regulatory challenges.

While tobacco remains a contentious legislative issue, the scale and proliferation of tax-evading brands continue to weaken the system from within.

Illicit tobacco products now account for a major fraction of the market, avoiding taxation, regulation, and health warnings. These low-cost, unregulated cigarettes not only disrupt fair market competition, but they also deplete government funds that could otherwise be directed toward important programs. Conservative estimates show that the unchecked selling of these items causes annual tax losses of more over Rs 415 billion, sources said.

The uneven playing field poses a serious challenge for legitimate businesses who follow tax rules and regulatory procedures. These compliant players find themselves in a difficult position, losing market share to low-cost illicit products that are widely available across both urban and rural markets, the sources said, adding: “Rising tax rates were supposed to discourage smoking, but in practice, they have inadvertently encouraged the move to cheaper, illicit alternatives. With price becoming a deciding factor for many consumers, particularly those in lower income groups, tax-paid items struggle to remain viable.”

Economic analyst Osama Siddiqui said, “A full-scale crackdown, backed by stronger market inspections and consistent penalties, is essential to recover lost revenue and protect compliant businesses. As Pakistan continues to face economic pressure, a coordinated crackdown, backed by stronger tracking systems and inter-agency collaboration, can help restore lost revenue and protect compliant market players from further erosion.”

Copyright Business Recorder, 2025

Comments

Comments are closed for this article.