Over Rs300b lost annually to illicit cigarette trade
In a recent episode of The Express Tribune Podcast, in collaboration with #BehtareenPakistan, experts warned that Pakistan loses more than Rs300 billion annually due to the unchecked trade of illicit cigarettes.
The conversation highlighted how tax evasion, weak enforcement of the Track and Trace system, and regulatory loopholes are crippling both public revenue and health safeguards.
Speaking on the podcast, CEO of the Institute for Public Opinion Research (IPOR), Junaid Iqbal, said, 'This is not just a health issue—it's an economic crisis.
When more than 40% of the cigarette market goes untaxed, the state loses the ability to fund vital services. Smugglers are filling the gap while legitimate businesses suffer.'
Panelists revealed that illegal cigarette manufacturers are exploiting the system by avoiding the Federal Excise Duty and producing below the legal price threshold.
These untaxed products are then sold cheaply, undercutting lawful manufacturers and contributing to a shadow economy that thrives on regulatory inaction.
The podcast also explored the broader impacts of the illicit trade. Experts emphasised that this is not simply a revenue issue—it also has dire implications for public health. Consumers of illegal cigarettes are often exposed to unregulated, potentially more harmful products.
In response to these challenges, the panel advocated for the urgent implementation of a fully functional track-and-trace system to digitally monitor cigarette production and distribution. They also called for tougher penalties for violators and more transparent oversight by tax authorities.
Iqbal stressed, 'There needs to be a serious political will to act. The solution is not just about enforcement—it's about protecting Pakistan's economy from systemic exploitation.'
The podcast concluded with a consensus that only a coordinated approach—combining technology, regulation, and awareness—can dismantle the illegal trade and reclaim lost revenue for the nation.
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