IREN seizes illicit tobacco products worth billions of rupees in recent years
ISLAMABAD: The Inland Revenue Enforcement Network (IREN) has emerged as Pakistan’s frontline enforcement arm against illicit tobacco, seizing billions worth of raw tobacco and illicit cigarette sticks with focus on plugging loopholes across Pakistan.
Senior government officials told Business Recorder that the scale of enforcement underscores both IREN’s growing effectiveness and the magnitude of smuggling that continues to dominate the domestic market. The Inland Revenue Enforcement Network (IREN) has recorded a significant enforcement drive in recent years, confiscating illicit tobacco products and raw materials.
Track and Trace system used to be considered and labelled as the panacea against all ills, plaguing the revenue-rich tobacco sector. However, the buoyancy of the illicit tobacco and cigarette trade has not only weathered this digital storm but started making quite aggressive inroads in the monitoring system, defeating systemic effectiveness and usefulness.
In Financial Year 2022-23, the network carried out 308 raids, seizing over 1.1 million kilograms of raw tobacco and 218.98 million illicit cigarette sticks. The estimated value of seizures stood at Rs 1.9 billion, with duties and taxes amounting to Rs 2.5 billion.
In fiscal year (2023-24), enforcement intensified with 624 raids, resulting in the confiscation of 413.42 million illicit cigarette sticks. The estimated value of seizures stood at Rs 1.07 billion, with duties and taxes estimated at Rs 2.8 billion. Importantly, six illegal factories were also sealed during this period.
During fiscal year (2024-25), in total 472 raids were conducted, seizing 13,947 kilograms of raw tobacco and 290.87 million sticks of illicit cigarettes. The seizures were valued at Rs 5.2 billion, with duties and taxes estimated at Rs 7.7 billion. Two illegal factories were sealed.
Cumulatively, from 2022 to 2025, IREN conducted 1,404 raids nationwide, seizing over 1.13 million kilograms of raw tobacco and 923.26 million illicit cigarette sticks, while also sealing eight illegal factories. The estimated value of these seizures stood at Rs8.2 billion, with corresponding duties and taxes surpassing Rs 13 billion, officials said.
The raw tobacco seizures, when converted, equate to an estimated Rs 1.13 billion cigarette sticks (calculated at one gram of tobacco per stick). Officials emphasized that if these consignments had not been intercepted, a huge volume of non-duty-paid cigarettes would have been available in the market, further undermining government revenues and creating additional public health concerns.
Despite the strong results, systemic weaknesses in the Track & Trace System (TTS) and smuggling of especially the low-cost international brands continue to pose challenges. Officials maintained that vigilant on-ground enforcement and accountability mechanisms are essential to combat illicit tobacco trade.
“The unprecedented seizures prove that IREN is working efficiently,” said a senior enforcement officer. “However, without closing the loopholes, the illicit trade will continue to adapt and survive.”
Despite strong enforcement gains, smuggling of low-cost international brands continues to erode the legitimate tax-paid market. Brands such as Pine, Oris, Camel, and Melano (smuggled) are readily available at prices well below local legal products.
According to the Pakistan National Heart Association (PANAH) and industry surveys, 20–30 percent of Pakistan’s cigarette market is dominated by smuggled brands. These contraband products deprive the exchequer of billions in tax revenue while creating unfair competition for compliant manufacturers. As per the prevailing tax structure, the minimum retail price of a tax-paid cigarette pack is approximately Rs 210.
In contrast, smuggled brands are sold for as low as Rs 50–100 per pack. This stark price gap has enabled smuggled products to penetrate deep into the consumer market, especially among low-income, price-sensitive segments.
In effect, these brands are filling the demand for low-cost cigarettes that cannot be met by the regulated sector. Interestingly, the consumers of tobacco products of the two complaint prominent cigarette manufacturers are also converting to the smuggled products, causing further loss to the exchequer.
IREN functions under a multi-tier enforcement structure. The Director General, Intelligence & Investigation (IR) acts as Chief Coordinator, while seven regional hubs manage operations across provinces. Each Hub is supervised by a Coordinator (BS-19/20) who manages enforcement actions through units/squads notified by the RTOs, CTOs & MTO falling in his respective territorial jurisdiction.
Enforcement is supported by checkpoints on highways, toll plazas, and border crossings. These efforts, combined with intelligence-led targeting and inter-agency collaboration, have enabled IREN to significantly scale up its interdiction capacity.
Copyright Business Recorder, 2025