PM directs crackdown against illicit cigarette trade

ISLAMABAD: Prime Minister Imran Khan has shown serious concerns over the increasing illicit trade of cigarettes in Pakistan, causing considerable loss to the national exchequer on account of tax evasion.

The prime minister also said in a letter that the rise of illegal cigarettes is impeding various measures taken by the government to effectively address this public health issue.

The letter issued from the prime minister’s office said that tobacco use is one of the major causes of serious illness and death in Pakistan. “Keeping in view its health and economic implications, the Prime Minister has taken a serious note of the above situation and has been pleased to desire that a country-wide crackdown be launched against the sale of illicit cigarettes,” the letter stated.

According to the PM office letter, Ministry of National Health Services, Regulations and Coordination and the Federal Board of Revenue have been directed to launch a country-wide crackdown operation against sale of illicit cigarettes on priority basis and a monthly progress report be submitted.

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According to details, the country suffers an annual loss of more than Rs30-40 billion because of illegal tobacco trade. Currently the market share of illicit cigarettes stands at 33 percent while the share of legitimate industry is 67 percent. But the total tax collected from this 33 percent only amounts to 2 percent of the total tax collected from tobacco manufacturers.

In financial year 2018-19, the national exchequer received a tax contribution of Rs115 billion out of which Rs113.5 billion was paid by two companies having 67 percent market share while the rest of the 33 percent market only paid Rs1.5 billion in tax.  

According to official resources, it is hoped that with the latest directions from the prime minister, authorities will increase efforts to enforce laws and curb the menace of illicit trade of tobacco to avoid huge exchequer losses.

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Shahzad Paracha
The writer is a member of Pakistan Today's Islamabad bureau. He can be reached at [email protected]
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