Illicit cigarette sale causing losses of billions to exchaquer

ISLAMABAD: The Pakistan Tobacco Company (PTC) has shared the latest market trends, saying that the sale of illicit (smuggled, tax-evaded, and counterfeit) cigarettes has increased to around 60 per cent in South Punjab, resulting in a loss of billions of rupees to the national exchequer.

While addressing the media in Multan, Business Development Analyst Mohsin Ali mentioned that South Punjab has been the most affected by tax evaded and smuggled brands, which are being openly sold at retail outlets.

He said that after successive increases in excise duties, consumers have moved to cheaper, tax-evaded, and smuggled cigarette options, which are illegal. “The irony is that these cigarette brands are openly sold in the market as enforcement has not been able to create the desired level of deterrence.”

A market visit was conducted to different areas in Multan by media persons to see the growing trend of illicit cigarettes and how laws are being flouted. It is important to note that the government of Pakistan has set the minimum price of a pack of cigarettes at Rs127.44, which is not being enforced in letter and spirit. The majority of the cigarette brands are being sold in south Punjab at prices ranging from Rs80 to Rs130.

It was also observed that majority of the cigarettes being sold were without track and trace stamps. Smuggled cigarettes of various brands were also available, which were being sold without a graphical health warning. Illicit cigarette manufacturers are openly flouting rules and regulations through free cigarette packets and reward schemes, among other activities.

In order to curb this growing trend of illicit cigarettes, the government must direct law enforcement agencies against this organized crime network and take strict action against the sale and distribution network of the tax-evaded cigarette industry.