The government of Pakistan loses Rs300 billion in taxes every year due to the fact that around 54% of cigarette brands in the country are unlawful, according to a study by the Institute for Public Opinion Research (IPOR). Few brands adhere to the 2021 Track and Trace System (TTS), and many more do not have the required Graphic Health Warnings (GHWs). There are 413 brands in circulation at the moment.
According to the study, about half of these cigarettes that don’t comply are illegally imported, while the other half are made in the country but don’t pay taxes. Surprisingly, as low as Rs40 for a packet of 332 different brands, which is below the legally mandated minimum price of Rs162.25.
Federal Board of Revenue (FBR) officials are under pressure from experts to step up enforcement in rural areas, where noncompliance is more prevalent than in cities. Combating the illicit cigarette trade could be achieved through stricter monitoring of retail locations and harsher fines.
To prevent further income loss due to this pervasive problem and guarantee compliance with rules, the paper urges both the government and manufacturers and retailers to work together.
