ISLAMABAD: ACT Alliance Pakistan has appreciated the Federal Board of Revenue for its recent actions against illegal tobacco trade, illegal cigarette manufacturing, non-duty-paid stock, and violations of the Track and Trace System (TTS), which will result an increase of approx Rs 50 billion in tax revenue during current financial year.
These enforcement steps show that the real revenue challenge in Pakistan’s cigarette sector is not the tax rate on legal products alone, but the expanding illegal cigarette economy that continues to steal market share and public revenue.
Mubashir Akram, Country Director, ACT Alliance Pakistan said in a statement that it is unfortunate that some NGOs continue to focus almost exclusively on increasing taxes on the legal tobacco industry, while remaining silent about the local illegal cigarette manufacturers, smuggled brands, under-priced packs, and non-TTS products that are damaging tax collection far more directly.
Akram said the legal tobacco industry’s data and independent assessments indicate that total cigarette consumption in Pakistan has remained broadly stable at around 80 billion sticks annually, while legal sales have collapsed from nearly 65 billion sticks to nearly 36 to 40 billion sticks. “This means demand has not disappeared,” Butt said. “It has migrated from the documented, tax-paying sector to the illegal, untaxed, and unregulated sector.”
ACT Alliance made it clear that it supports lawful regulation, documentation, and responsible enforcement, but opposes agenda driven policy advocacy that punishes the legal sector while leaving illegal operators untouched. It called on the federal government, FBR, provincial administrations, and enforcement agencies to prioritize sustained action against illicit manufacturing, smuggling, counterfeiting, below-minimum-price sales, and non-compliant retail distribution. Mubashir Butt concluded that tax policy must be sequenced correctly: stabilize the legal market, expand enforcement, recover the tax base, and then pursue gradual, evidence-led reforms.
Copyright Business Recorder, 2026
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