LAHORE – The share of illicit cigarette trade in Pakistan is recorded at around 18 per cent which officials said could be reduced further by ensuring the implementation of the track and trace system across the board.
Many independent research studies suggest that multinational companies have been trying to exaggerate the volume of illicit cigarettes in the country to 40 to 42 per cent to force the government to withdraw the recent hike in Federal Excise Duty (FED) on cigarettes.
Anti-tobacco activists have advised the government against falling into the trap of the multinational tobacco companies which have been lobbying to see a reduction in taxes on cigarettes in the upcoming federal budget.
They said the government was expected to collect around 200 billion rupees in taxes from the tobacco companies this fiscal year after jacking up the taxes against the tax collection of 148 billion rupees the previous year.
They said multinational companies have been pushing the same 40 to 42 per cent illicit data in the market for the last many years without any credible source or research study. The last year, they also run paid campaigns in the media with the same number.
The multinationals fed to the Federal Board of Revenue (FBR) the same numbers before the disastrous introduction of the three-tier system, and they fall for it, resulting in the loss of billions of rupees in revenue.
The activists said that curbing sales of illicit cigarettes in the market comes under enforcement and should not be handled with tax policy. They urged the government to implement a track and trace system across the board with better border management to discourage the smuggling of cigarettes in Pakistan.
