BR100 Decreased By (-0.15%)
BR30 Decreased By (-0.74%)
KSE100 Decreased By (-0.41%)
KSE30 Decreased By (-0.67%)
BECO 5.80 Decreased By ▼ -0.23 (-3.81%)
BML 58.03 Increased By ▲ 5.28 (10.01%)
BOP 33.85 Decreased By ▼ -0.40 (-1.17%)
CNERGY 8.15 Decreased By ▼ -0.01 (-0.12%)
DCL 11.77 Decreased By ▼ -0.57 (-4.62%)
FCCL 53.35 Decreased By ▼ -0.54 (-1%)
FCSC 5.40 Increased By ▲ 0.18 (3.45%)
FFL 17.89 Decreased By ▼ -0.14 (-0.78%)
FNEL 1.31 Increased By ▲ 0.01 (0.77%)
HUMNL 11.06 Increased By ▲ 0.06 (0.55%)
KEL 8.05 Decreased By ▼ -0.06 (-0.74%)
KOSM 5.45 Increased By ▲ 0.07 (1.3%)
MLCF 87.19 Decreased By ▼ -0.86 (-0.98%)
NBP 184.60 Decreased By ▼ -1.88 (-1.01%)
PACE 11.62 Increased By ▲ 0.90 (8.4%)
PAEL 40.31 Increased By ▲ 0.37 (0.93%)
PIAHCLA 26.10 Decreased By ▼ -0.07 (-0.27%)
PIBTL 17.09 Decreased By ▼ -0.23 (-1.33%)
PPL 228.40 Decreased By ▼ -4.38 (-1.88%)
PRL 34.59 Decreased By ▼ -0.36 (-1.03%)
PTC 67.35 Decreased By ▼ -0.21 (-0.31%)
SEARL 91.00 Increased By ▲ 0.07 (0.08%)
SSGC 26.90 Decreased By ▼ -0.27 (-0.99%)
TELE 8.53 Decreased By ▼ -0.04 (-0.47%)
THCCL 66.14 Increased By ▲ 6.01 (10%)
TPLP 9.29 Increased By ▲ 0.53 (6.05%)
TREET 24.59 Increased By ▲ 0.05 (0.2%)
TRG 71.69 Decreased By ▼ -0.06 (-0.08%)
WAVES 10.98 Increased By ▲ 1.00 (10.02%)
WTL 1.28 Increased By ▲ 0.02 (1.59%)

KARACHI: Fawad Khan, spokesperson for Mustehkam Pakistan, has emphasised that “Illicit trade is draining the country's resources and undermining its ability to function effectively. We hope the World Health Organization considers that further tax increases could unintentionally encourage the illegal cigarette market in Pakistan.”

He further stated that while legal cigarette manufacturers contribute nearly all of the sector’s tax revenue, they face growing pressure from untaxed and illicit products, many of which do not carry mandatory health warnings.

“Unless enforcement is strengthened, additional tax hikes may prove counterproductive by driving more consumers toward illicit brands,” he warned.

Instead of focusing solely on tax increases, Pakistan must prioritise anti-illicit trade enforcement, as higher taxes without strong implementation may shift more consumers toward illegal products rather than reducing tobacco use.

Current data revealed that the compliant tobacco sector generates nearly 98% of total tobacco tax revenue, yet holds just 46% of the market share. Meanwhile, untaxed and illegal products now account for over half of the market, resulting in an estimated annual loss of Rs 415 billion to the national exchequer.

While the World Health Organization (WHO) continues to advocate for higher tobacco taxation as part of its efforts to reduce smoking, experts cautioned that ignoring the rampant illicit trade could undermine both public health objectives and revenue gains. If not addressed, further tax hikes may inadvertently fuel the black market for cigarettes.

Fawad Khan emphasised that policy momentum must now be translated into action, including the implementation of a robust Track & Trace system, closing legal loopholes, and enhancing coordination among the FBR, Customs, and law enforcement agencies. He noted that similar digital monitoring mechanisms in the sugar and cement sectors have significantly improved revenue collection and could yield similar results in the tobacco sector.

Copyright Business Recorder, 2025

Comments

Comments are closed for this article.