ISLAMABAD: The sale of smuggled cigarettes has reached alarming proportions, inflicting an annual loss of over Rs 20 billion to the national kitty.
Sources said that multinational cigarette manufacturers have hired the help of Nielsen, an internationally reputed market research company, to produce a ‘doctored report’, which was a gross misrepresentation of facts and against local manufacturers of tobacco products.
The report mentions little or nothing about smuggled cigarettes being sold in Pakistan.
According to Framework Alliance (one of WHO research partners), “The tobacco industry tends to underestimate the impact of smuggling in Pakistan and the major beneficiaries of the sale of smuggled cigarettes were multinationals including Phillip Morris, whose major brands Marlboro, Dunhill, Benson & Hedges were the main contributors to smuggled cigarettes market.”
The sale of their brand either here or abroad helps only in multiplying their revenues multifold, while at the same time these companies give nothing to the countries in which their brands are being sold, sources in the health department and tobacco industry said.
While the smuggled cigarettes were being sold in every corner of Pakistan, the multinationals were allegedly pressurising and misdirecting government officials to take action against the local manufacturers. “If the FBR would focus more on non-duty paid items, smuggled items would not be available in the local market,” the source said, adding that the main reason for failure to control cigarette smuggling was lack of efforts by government agencies.
It is generally alleged that only superficial actions were being taken by the FBR against the smugglers and they need to conduct effective raids on major wholesale markets to stop illegal sale. “There is a need to execute a comprehensive and holistic strategy to tackle cigarette smuggling in Pakistan,” the source said.
As per Pakistani law, it is necessary for local cigarette manufacturers to print “pictorial health warning” and “made in Pakistan” on the cigarette packs. Any cigarette pack that does not obey these laws is smuggled and need to be ceased immediately, the sources aid. Various other laws already exist and, if enforced rigorously, could bring down the sale frequency of this illicit cartel and help the government in raising more revenues, he added.
Rigorous efforts would not only hinder sale of the smuggled brands in Pakistan, but also expose all real beneficiaries of these smuggled brands as well, the sources said while requesting anonymity.
“The government needs to focus more on these smuggled brands as the duty evaded on these brands were many times more than local tax evaders. The government could increase its revenues by an estimated amount of Rs 20 billion annually by curbing the sale of smuggled cigarettes,” the source added.