ACT Alliance Pakistan has appreciated the Federal Board of Revenue for its recent actions against illegal tobacco trade, illegal cigarette manufacturing, non-duty-paid stock, and violations of the Track and Trace System (TTS), which will result an increase of approx 50 billion in tax revenue during current financial year. These enforcement steps show that the real revenue challenge in Pakistan’s cigarette sector is not the tax rate on legal products alone, but the expanding illegal cigarette economy that continues to steal market share and public revenue.
Mubashir Akram, Country Director, ACT Alliance Pakistan said in a statement that it is unfortunate that several foreign-funded local NGOs continue to focus almost exclusively on increasing taxes on the legal tobacco industry, while remaining silent about the local illegal cigarette manufacturers, smuggled brands, underpriced packs, and non-TTS products that are damaging tax collection far more directly.
ACT Alliance Pakistan called on the federal government, FBR, provincial administrations, and enforcement agencies to prioritize sustained action against illicit manufacturing, smuggling, counterfeiting, below minimum price sales, and non-compliant retail distribution. Mubashir concluded that tax policy must be sequenced correctly: stabilize the legal market, expand enforcement, recover the tax base, and then pursue gradual, evidence-led reforms.
“Pakistan cannot afford economic policy built on slogans,” he said. “The real test is whether the state will protect a lawful sector that pays nearly one billion dollars, or continue allowing illegal operators to steal more than that every year.”