Illicit trade, smuggling: MoC says it doesn't maintain any related data
This proposal was put forward by Additional Secretary (Trade Policy), Salman Mufti, during a meeting of the Sub-Committee of the Senate Standing Committee on Commerce, chaired by Senator Sarmad Ali. Senators Faisal Saleem Rahman and Zeeshan Khan Zada also attended the meeting.
The sub-committee convened to assess the validity of claims made by the economic think tank PRIME and, if substantiated, to propose sustainable solutions.
Pakistan loses Rs750bn tax revenue to illicit trade, smuggling yearly: report
PRIME, which includes retired FBR officials among its members, claimed that illicit trade of five items in Pakistan accounts for 56% of total trade, while formal (legal) trade represents only 44%.
According to their estimates, the total value of illegal trade is Rs 750 billion annually, including Rs 300 billion in tobacco, Rs 60–65 billion in pharmaceuticals, Rs 106 billion in tyres and lubricants, Rs 270 billion in petrol/diesel, and Rs 10 billion in tea.
PRIME also referenced a claim by a member of the Competition Commission of Pakistan (CCP), a former FBR officer with experience in Customs Intelligence, who estimated the volume of illicit trade at $16 billion annually.
These figures, particularly the Rs 300 billion attributed to the tobacco sector, raised concerns among committee members, who questioned their accuracy. The Executive Director of PRIME, however, distanced himself from full responsibility for the data, noting that the figures were sourced from various surveys and United Nations reports.
Committee members from Khyber Pakhtunkhwa (KP) argued that survey-based data is often perception-driven and lacks concrete evidence.
'The figures related to the tobacco sector appear exaggerated. If they are accurate, then action must be taken against the officials of the relevant agencies for failing to curb this menace,' said Senator Faisal Saleem Rahman, who also chairs the Senate Standing Committee on Interior.
He referred to the ongoing national campaign 'Behtareen Pakistan,' which also cites the Rs 300 billion figure for illegal tobacco trade. He warned that if the figure is proven incorrect, PRIME should retract its report, which has been used by major cigarette manufacturers to justify the campaign.
'As someone from KP — where districts like Swabi, Mardan, and Charsadda are major tobacco-growing areas—it is my responsibility to safeguard the rights of our farmers. As Chairman of the Interior Committee, I must also uphold the integrity of law enforcement agencies,' he added.
Senator Zeeshan Khan Zada supported his colleague, recommending that the reported financial loss figures be independently verified. He called for a joint meeting of all stakeholders—both public and private—to hear diverse viewpoints and reach a well-informed conclusion. Senator Sarmad Ali suggested inviting representatives from Pakistan Tobacco Company and Philip Morris to the next meeting, along with local cigarette manufacturers, tobacco growers, FBR officials, and law enforcement agencies, to provide a platform for all stakeholders to present their perspectives.
The committee also plans to hold a separate meeting focusing on the pharmaceutical sector to investigate the causes of illicit trade and its impact on national revenue.
Copyright Business Recorder, 2025
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