Pakistan’s cigarette industry is under a cloud of confusion fueled by contradictory statements and false statistics from anti-tobacco organizations. These misleading narratives not only mislead decision-makers and the public but also provide cover for tax-evading cigarette manufacturers who are more interested in securing foreign funding than in any sincere commitment to public health or the country.
“I challenge all these organizations who make false claims in the name of public interest/health with false data points to come and do a market survey with me. I assure you the facts will be opposite to what they claim. Their motivation seems to be greed, which drives them to support the agenda of illicit cigarette manufacturers.” Said Junaid Khan-Senior Economist.
Roughly four studies have surfaced in the last year that are just done to alleviate the masters who pay these ATOs to disrupt Pakistan, similar to what India used to do by penetrating sleeper cells within the country to instigate violence. If they are paid USD2 million a year, nobody knows where the money goes, but people working in these organizations are the real beneficiaries. He added.
A study titled “Incidence of Illicit Trade of Cigarettes in Pakistan: A Case Study for Islamabad Capital Territory,” allegedly by the World Health Organization (WHO) and a few anti-tobacco organizations, claimed that the illicit cigarette market in Pakistan ranges from 9 to 17 percent of the total market. This figure is significantly lower than estimates from domestic and foreign research institutes. There are 26 cigarette manufacturers registered with FBR, of which 2 pay 98% of the total tobacco tax. Does any research question the remaining 24 companies? No! Because these 24 companies also put a fair share in ATO’s bucket.
The research mentioned is technically flawed because it is based on collecting empty cigarette packs. No data has been collected on the price at which these illicit, non-tax-paying brands are sold. FACT: Locally manufactured tax-evaded brands have both the picture health warning and the correct price printed on them. But because they are non-tax-paid, they sell for a fraction of the printed price. This empty-pack survey research is useless. That reflects the true predicament of tobacco control in Pakistan.
What is unfortunately funny is that another report published by the Human Development Foundation (HDF) titled “Study to Assess the Volume of illicit cigarette brands in Pakistan” states that the illicit cigarette trade in Pakistan is only 17%. In contrast, in the same report, the researchers gave data that 71.06% of cigarettes were sold for PKR 30-60. How blinded can these so-called anti-tobacco organizations be by their greed for foreign funding? In what world is a PKR 30 cigarette packet legal? According to their research, it is being established that illicit cigarette incidence in Pakistan is at least 71.06% – add to that 10.37% of no price mentioned, taking the illegal incidence cigarette in their sample to 81.43%! Could these individuals perhaps be unaware of the full extent of the illicit cigarette trade? The data they present clearly indicates that, in their sample, at least 81.43% of cigarettes are illicit. Yet, they still maintain that only 9-17% of the market consists of illegal cigarettes. This raises questions about whether they might be unintentionally downplaying the issue, inadvertently providing cover to illicit cigarette manufacturers.
A proposal document titled” Recovering healthcare costs and saving lives: – An urgent call for tobacco tax increase in the budget 24-25” released on 16th May 2024 in association with HDF, SPDC. Chromatic, CRD, Aurat Foundation and Indus Hospital proposes increase in tobacco tax will increase government revenue but nowhere mentions illicit trade or the need for enforcement.
My question is simple. The biggest threat to tobacco control in Pakistan is the vast presence of cheap, illicit, non-tax-paying cigarettes. How come not a single anti-tobacco advocate has raised a concern on this issue? The answer is simple – they are giving cover to the illicit cigarette operators. They are pushing for higher taxes since they know that the biggest beneficiary of an increase in taxes is simply the non-tax paying illegal sector cigarette, the demand for which grows with every tax increase. I request Prime Minister Shahbaz Sharif to investigate these so-called anti-tobacco organisations and find out what their real agenda is. I request the Prime Minister to explore why these so-called anti-tobacco organisations are not worried about the growing presence of cheap, non-tax paid illicit cigarettes in Pakistan- Junaid Khan added.
Illicit trade is a menace that will destroy Pakistan and its economy. If these foreign fundings are not stopped, they will continue to hamper government efforts and leave its people in shambles. The only beneficiary will be the owners of anti-tobacco organizations and the illicit cigarette manufacturers.
