ISLAMABAD: The federal government has reversed its earlier decision to dissolve the Pakistan Tobacco Board (PTB), following strong opposition from farmers, tobacco companies, and PTB officials, who warned of serious economic, legal, and regulatory repercussions.
According to a notification issued by the Ministry of National Food Security and Research on Wednesday, the Cabinet revoked its January 1 decision that had ordered the winding up of PTB under a rightsizing initiative. The government has now formally restored the Board in line with its founding statute, reaffirming its central role in regulating the tobacco sector.
The reversal comes after weeks of criticism that dissolving PTB and shifting its powers to provinces would destabilize the industry, reduce farmer incomes, and trigger a surge in unregulated and illicit tobacco trade.
Earlier, PTB officials in a strongly worded letter to the finance minister had condemned the cabinet’s dissolution decision, terming it unconstitutional and illegal. They argued that PTB was established under the Pakistan Tobacco Board Ordinance, 1968, a federal law that cannot be repealed or devolved without new legislation. The officials also warned that transferring functions to provinces could create conflicts over tobacco cultivation, production, manufacturing, exports, taxes, and pricing, while undermining federal excise duty (FED) and sales tax collection on tobacco products.
The letter also highlighted that tobacco, as a special crop tied to trade, commerce, and industry, has always been treated as a federal subject. The Law and Justice Division, in a 2012 clarification, confirmed that PTB’s mandate including regulating exports, setting grading standards, conducting research, and providing training falls under Entry 27 of Part-I of the Federal Legislative List, making it a federal responsibility even after the 18th Amendment.
Officials pointed out that PTB’s role was critical to Pakistan’s economy, with tobacco exports growing from $42 million in 2019-20 to $108 million in 2024, and the sector contributing Rs237 billion in excise duty and sales tax in FY25. As a withholding agent for the Federal Board of Revenue (FBR), PTB is expected to remit up to Rs600 million in taxes this fiscal year alone.
Farmers’ associations in Khyber-Pakhtunkhwa, where most of Pakistan’s tobacco is cultivated, also welcomed the decision, saying the PTB safeguards their interests by ensuring fair pricing and protecting them from exploitation by middlemen and illicit traders. Industry stakeholders echoed the sentiment, noting that abolition of PTB would have created regulatory chaos and damaged export competitiveness.
However, some insiders caution that restoration is only the first step. “PTB must be modernized to strengthen governance, enhance exports, and balance health concerns with economic realities,” one official remarked, adding that reforms are essential to make the board more effective.
