With a firm commitment to protecting national revenue and strengthening its formal economy, Pakistan is intensifying efforts to curb the growth of illicit trade—particularly in the tobacco sector, where tax evasion continues to pose a significant challenge. Experts estimate that the country loses nearly PKR 415 billion annually due to the unchecked spread of untaxed and unregulated cigarette sales.
While authorities have made strides in policy and oversight, the pace of enforcement has struggled to match the agility of illegal operators. As a result, the formal tobacco sector—despite contributing an overwhelming 98% of the industry’s total tax revenue—has seen its market share shrink to just 46%. The legal industry still contributes approximately PKR 270 billion in taxes each year, reflecting its vital role in the national economy.
“Illicit trade is not just an economic loophole — it’s a direct challenge to Pakistan’s efforts to build a fair, transparent economy. Every rupee lost is a missed opportunity to invest in our future — in education, healthcare, and infrastructure,” says Fawad Khan, spokesperson for Mustehkam Pakistan, a local initiative advocating for public interest-driven governance. “While we welcome global engagement, it must operate within the bounds of Pakistan’s laws and institutions. No entity should be allowed to bypass our systems under the guise of advocacy.”
Recent developments have also prompted closer scrutiny of foreign entities operating in Pakistan’s health and policy landscape. The Ministry of Interior has reiterated its directive for the immediate suspension of operations by two international non-governmental organisations (INGOs)—Campaign for Tobacco-Free Kids and Vital Strategies—citing their failure to comply with national registration requirements.
Despite a clear order issued in early 2024 to halt operations, the INGOs reportedly continued their activities, including channeling funds to local organisations and engaging with policymakers without securing the necessary approvals from the Ministry of Interior, Economic Affairs Division, or the Securities and Exchange Commission of Pakistan.
In response, the Ministry has now directed the State Bank of Pakistan to freeze all accounts linked to these INGOs, underlining the seriousness of the issue and the government’s resolve to enforce legal standards across the board.
Pakistan remains fully committed to constructive engagement with international partners. But as the country moves to protect its economic integrity and legal framework, all stakeholders—foreign and local—are expected to operate transparently and in full accordance with national laws.
