‘Silent spectators’: KP police fails to stop illicit cigarette trade despite IPO alerts

ISLAMABAD: As the production of counterfeit cigarettes in Khyber Pakhtunkhawa has been depriving the national exchequer of billions of rupees worth revenue, the Khyber Pakhtunkhawa police are acting a silent spectator despite written alerts by the Intellectual Property Organization (IPO) to take action against the infringement.

According to sources, the KP police have kept a mum on the matter of counterfeit cigarette in the province by not taking action against the elements.

They said the IPO’s Pakistan chapter has time and again requested the KP police to take action but so no concrete steps have so far been taken in this regard.

According to sources, the country has been suffering an annual loss of more than Rs30-40 billion because of the illegal tobacco trade. Currently, the market share of illicit cigarettes, the majority of which are local, stands at 33 per cent, while the share of taxpaying industry is 67pc.

However, the local manufacturers are contributing only 2pc of the total tax collected by the government from the tobacco industry. In the financial year 2018-19, the national exchequer received a tax contribution of Rs115 billion from the cigarette manufacturing industry out of which Rs113.5 billion was paid by two multinational companies, while local tax-evading manufacturers, having 33pc of market share, paid only Rs1.5 billion in FY19, sources maintained.

Documents available with Pakistan Today disclosed that the IPO Pakistan chapter has taken serious cognizance of complaints related to the production of counterfeit cigarettes in KP and requested the Inspector General Police (IGP) to take necessary action against the violation as per given laws and rules under intimation to IPO-Pakistan.

However, after passing 10 months, no concrete action has been taken so far against the infringement of the trademark of the National Tobacco Industries (NTI).

Last year, the IPO-Pakistan had asked KP police chief on 14th June 2019 to look into the matter of infringement of trademark ‘KISAN’ and take action against the Universal Tobacco Company (UTC), which has allegedly been involved in the production of the counterfeit cigarette under the brand name of ‘KISAN’. The brand name ‘KISAN’ is registered with the IPO-Pakistan since 15th February 2007 and the Khyber Tobacco Company has the sole rights to produce the said brand for the territory of Pakistan, duly authorised by NTI.

NTI Chief Executive Siraj Muhammad, in a letter to the IPO-Pakistan, has asked to take action without any delay in order to avoid any further damage- both monetary and goodwill- to duly registered brand of NTI and to protect the revenue collected in the form of different taxes levied by the federal government on the production of legitimate cigarettes especially in the current scenario when the country is facing the coronavirus pandemic.

KP DIG Sher Akbar Khan could not be reached for comments despite repeated efforts.

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Ahmad Ahmadani
The author is a an investigative journalist at Profit. He can be reached at [email protected]
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