Curbing non-duty paid cigarette output: FBR rolls out multi-tier enforcement plan on PM’s order

ISLAMABAD: Following strict directives of Prime Minister Shehbaz Sharif, the Federal Board of Revenue (FBR) has implemented a comprehensive and multi-layered enforcement strategy aimed at eliminating non-duty-paid cigarette production, strengthening intelligence-based monitoring and disrupting illegal manufacturing and supply networks.

Senior FBR officials told Business Recorder that Pakistan continues to face the serious challenge of illicit trade and unlawful activities in the tobacco sector, which adversely affect the national economy and result in substantial loss of public revenue. The unchecked movement, storage, and use of non-duty-paid unmanufactured tobacco, being the primary raw material for cigarette manufacturing, poses a grave risk as it directly facilitates large-scale evasion of Federal Excise Duty and other applicable taxes.

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Recognizing the gravity of this issue and its far-reaching economic implications, the Prime Minister has issued clear and categorical directions to decisively curb illicit practices in the tobacco and cigarette sector and to ensure strict enforcement of tax laws across the entire supply chain, including raw materials.

In pursuance of these directions, the Federal Board of Revenue (FBR) has implemented an enforcement strategy on national level.

This national initiative is being supported by relevant stakeholders and law-enforcement agencies to reinforce enforcement actions and safeguard government revenue.

Following the directions of the Prime Minister and in strict compliance with FBR’s enforcement plan, the Regional Tax Office (RTO) Peshawar carried out a successful enforcement operation in District Mardan, resulting in the seizure of approximately 2.75 million kilograms of unmanufactured tobacco from the godowns of M/s Khyber Tobacco Company. The recovered tobacco, which constitutes the basic raw material for cigarette manufacturing, was found to be non-duty paid. The estimated evaded Federal Excise Duty on the seized goods amounts to approximately Rs. 1.1 billion. The company is a known manufacturer of cigarette brands, including Kissan and Gold Street Classic.

Copyright Business Recorder, 2025