Pakistan loses an estimated Rs1.6 trillion annually to tax evasion, under-reporting and illicit manufacturing across 18 sectors, adding to pressure on public finances and efforts to broaden the tax base.
A review of publicly available reports identified 675 raids recorded in the Federal Board of Revenue’s (FBR) Inland Revenue Enforcement Network data between January and August 2026. Enforcement operations during FY2025-26 also resulted in significant seizures of illicit goods and raw materials.
The tobacco sector accounts for an estimated Rs300 billion in annual revenue losses. Pakistan’s cigarette market exceeds 80 billion sticks annually, with more than half linked to illegal trade. Illicit cigarette consumption is estimated at 43.5 billion sticks a year.
Macroeconomic analyst Osama Siddiqui said effective prosecution, asset recovery and sustained pressure on supply chains were essential to prevent illegal operators from resuming activities after raids.
The FBR has set a target of generating Rs778 billion through enforcement measures in FY2026-27. Achieving this goal will require consistent action against tax evasion and stronger follow-up investigations, beyond raids and seizures alone.
