ACT Alliance Pakistan backs FBR crackdown on illegal cigarette trade

ISLAMABAD – ACT Alliance Pakistan has appreciated the Federal Board of Revenue for its recent actions against illegal cigarette trade, illegal cigarette manufacturing, non-duty-paid stock, and violations of the Track and Trace System (TTS), which will result an increase of approx 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 several foreign-funded local 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, underpriced packs, and non-TTS products that are damaging tax collection far more directly. Mubashir Akram strongly criticized various NGOs for presenting what he called a “selective, incomplete, and deeply misleading” account of Pakistan’s tobacco economy, saying that such narratives damage public understanding, weaken fiscal policy, and divert attention away from the real issue of tax evasion by local cigarette manufacturers. These NGOs continues to understate the illegal cigarette market figures and its fiscal damage,” he said. “Recently an NGO places illicit cigarette consumption at around 34 to 35 percent while broader market evidence places it is more than 50 percent, the issue is no longer simple disagreement. It becomes a serious question of methodology, real hidden motive, and policy consequence.” Mubashir Akram added still if we take this NGO’s illicit market numbers of 35%, it means in Pakistan with a cigarette annual market of 80 billion, illegal cigarette market is about 28 billion sticks and annual loss of Rs 118 billion which is still huge for pakistan and cannot ig