A recent study has revealed that Pakistan is losing an estimated Rs325billion annually in tax revenue from the tobacco sector.
The report, conducted by the Institute of Public Opinion Research, highlighted alarming statistics, showing that 54% of cigarettes in the country are being sold illegally.
According to the findings, most cigarette manufacturing companies have failed to adhere to health warnings, and the track-and-trace system remains ineffective in curbing illegal sales.
This failure to implement effective control measures has resulted in a significant tax revenue loss.
The research further revealed that the country is facing widespread violations of government regulations regarding the sale price of cigarettes.
Cigarette brands are being sold for as low as Rs40 per pack, far below the minimum legal price of Rs162.25.
The study, which surveyed 19 different districts, found that out of 413 cigarette brands, only 19 had the required tax stamp, and just as many carried the approved health warnings. Shockingly, 286 brands had neither.
Despite the law requiring health warnings on cigarette packs since 2009, the sale of cigarettes without proper health warnings continues.
In 2021, the government introduced the track-and-trace system to curb tax evasion in the tobacco industry, but the system's failure to be fully implemented means that 54% of cigarettes are still sold illegally.
The report also stressed that smuggled and non-duty-paid cigarettes contribute significantly to the country’s financial losses, amounting to between Rs300 and Rs325 billion annually.
The lack of enforcement and the prevalence of illegal sales continues to impact Pakistan's efforts to boost revenue from the tobacco sector and protect public health.
