Missing revenue

The Federal Board of Revenue (FBR) needs to take action against manufacturers in addition to sellers, such as retailers, wholesalers, and kiosks, in its efforts to combat illicit cigarette production. The damage caused by this trade is becoming increasingly difficult to overcome. In April, the FBR launched a crackdown on illicit sale of counterfeit and non-stamped cigarettes and seized cigarettes worth Rs96 million. While these measures are commendable, there is a pressing need to include manufacturers in such crackdowns.

It is pertinent to mention that Pakistan's illegal cigarette trade results in an estimated annual loss of Rs310 billion in the form of unpaid excise taxes and duties. The sale of illegal cigarettes not only imposes a financial burden on the economy but also complicates efforts to address the health risks associated with it. Taxing the manufacturers involved in the illegal cigarette trade at the tobacco processing stage and implementing a robust track-and-trace system could significantly reduce these losses.

Usama Ghulam Rasool

Karachi