WHO's stepped up higher tax drive may fuel illicit cigarette trade
While intended to reduce smoking, the WHO's tax-centric approach is exacerbating an already rampant illicit cigarette trade, harming legitimate businesses, depleting public cash, and undermining regulatory integrity, experts of the industry said.
Pakistan has become a case study of unforeseen effects. Despite heavy taxation in accordance with WHO recommendations, the market has seen a noticeable shift toward illicit cigarette consumption, they said.
It may be added that legal tobacco companies now control less than half of the market, although accounting for roughly 98% of the industry's tax revenue. Untaxed and unregulated brands have invaded retail
shelves across the country, often selling for
less than the legal minimum price and without tax stamps.
'The illicit cigarette trade has now overtaken the legitimate sector, comprising 58% of the total market. Pakistan's annual consumption is around 82 billion sticks, yet only 34 billion are taxed, down sharply from 67 billion a decade ago,' said Asad Shah, Director at Pakistan Tobacco Company (PTC).
Shah noted that tax revenue potential from the sector stands at around PKR 570 billion annually, but actual collection reached just PKR 292 billion in FY 2023–24 and only PKR 223 billion in the first 11 months of the current fiscal year.
Although the WHO acknowledges illicit trade as a challenge, its policy guidance continues to emphasize taxation over enforcement.
'It's burdening compliant manufacturers while failing to curtail illicit and smuggled brands,' Shah added.
Experts said that public health objectives must be pursued alongside strong enforcement mechanisms, not only tax increases. Without this balance, the policy risks facilitating tax evasion, undermining investor confidence, and eroding public trust in the regulatory system.
Copyright Business Recorder, 2025
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
18 hours ago
- Business Recorder
Green energy and industrial development moot New horizons for investment in Balochistan will be opened: FPCCI chief
KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has termed the Balochistan Green Energy and Industrial Development Conference a promising step for the country's future. The event was held at Federation House, Karachi, in collaboration with the Balochistan Board of Investment and Trade (BBoIT) on Tuesday. FPCCI President Atif Ikram Sheikh said the conference would open new horizons for investment in the province. 'Balochistan has the potential to become the country's hub for green energy,' he noted, adding that FPCCI is committed to encouraging the business community across Pakistan to explore opportunities in energy, mines and minerals, food, and agriculture sectors. United Arab Emirates Consul General Bakhit Ateek Al-Rumaithi attended as the guest of honor. He expressed UAE's keen interest in investing across all key sectors of Balochistan. FPCCI Vice President and Regional Chairman Sindh Abdul Mohaimen Khan emphasized that the federation would motivate entrepreneurs nationwide to channel investments into the province. 'The energy, minerals, and agriculture sectors in Balochistan hold enormous promise,' he said. Mian Zahid Hussain, Chairman of FPCCI's Policy Advisory Board, observed that investments in Balochistan would bring high returns for both local and foreign investors. BBoIT Vice Chairman Bilal Khan Kakar also highlighted the province's opportunities, urging the business community to fully utilize FPCCI's apex platform for tapping into investment prospects. Copyright Business Recorder, 2025
Business Recorder
18 hours ago
- Business Recorder
Port congestion: Suggestions aimed at slashing container dwell time finalised
ISLAMABAD: To improve cargo clearance efficiency and easing congestion at the country's two key seaports, the Ministry of Maritime Affairs has finalised a set of recommendations to reduce container dwell time at Karachi Port and Port Qasim. The recommendations prepared by the Karachi Port Trust and Port Qasim Authority in collaboration with other experts were presented to the Federal Minister for Maritime Affairs, Muhammad Junaid Anwar Chaudhry, here on Tuesday. The minister instructed that the recommendations be forwarded to the Federal Board of Revenue (FBR) earliest, with directions to prepare an implementation plan within two weeks. Acting Chairman Karachi Port Trust, Rear Admiral Ateeq ur Rehman, and Rear Admiral Muhammad Khalid, Director Operations of Port Qasim Authority joined the meeting via video link from Karachi. The committee itself was established by the minister and is chaired by Umer Zafar Sheikh, Additional Secretary, Ministry of Maritime Affairs, with representation from KPT, PQA, Pakistan Customs, terminal operators, FBR, and other relevant stakeholders. The minister emphasised that the plan seeks to align Pakistan's port operations with global benchmarks, enabling faster clearances, smoother trade flows, and reduced operational costs for businesses. He also restructured the committee, assigning it a new mandate as an implementation body responsible for coordinating with the FBR and monitoring progress within the specified timeframe. The recommendations focus on addressing bottlenecks across the clearance chain, from delays in goods declaration filing, adjudication, and laboratory testing, to issues related to transportation, examination, auctioning, and gate-out processes. Key measures include promoting early or pre-arrival filing of goods declarations, shortening the filing window, and introducing fines for late submissions. Virtual hearings have been proposed to speed up adjudication, while the use of rapid screening technologies and expanded laboratory facilities has been advised to reduce testing delays. Copyright Business Recorder, 2025
Business Recorder
18 hours ago
- Business Recorder
CM Maryam visits Japanese hospital, seeks cooperation
LAHORE: Chief Minister Punjab Maryam Nawaz Sharif visited National Center for Global Health, Japan's world-renowned hospital for treatment of infectious diseases. She decided to introduce Japanese healthcare and health management system in Punjab, and said, 'Modern high-tech Japanese machinery, equipment and treatment methods will be used in public sector health system of Punjab.' She also decided to build Nawaz Sharif Medical District on the model of Japanese healthcare system. She said, 'We will introduce health insurance method in Punjab like Japan.' She and the members of her delegation were given a detailed briefing about Japanese treatment methods for diabetes, liver and infectious diseases. The Chief Minister visited different departments of the hospital, and reviewed various facilities and machinery provided in the hospital. She also spoke to Japanese medical experts, and was briefed about liver treatment in National Center for Global Health Medicine. Copyright Business Recorder, 2025
