The illicit sale of cigarettes in the country continues to be a pervasive issue, having a detrimental impact on government revenues as well as on public health.
The Pakistan Tobacco Company’s latest market trend report, unveiled on March 12, paints a grim picture. It reveals a disturbing trend in southern Punjab, where the sale of smuggled, tax-evaded, and counterfeit cigarette brands has surged to a staggering 60 percent, resulting in a loss of billions to our national exchequer.
While increases in excise duty have definitely been a factor in encouraging consumers to switch to cheaper, tax-evaded, and smuggled options, the lax response of the relevant regulatory bodies and law enforcement agencies should be scrutinized.
Their poor performance has led to a situation where the government-notified minimum price of a pack of cigarettes, Rs127.44, is being freely ignored, and most brands are being sold at prices ranging from Rs80 to Rs130. In addition, rules overseeing the cigarette trade that prohibit offering reward schemes are also being violated, further exacerbating the situation.
Despite the grand promises, the much-hyped technology-based surveillance Track and Trace (T&T) system, introduced by the FBR in the tobacco sector in July 2022, has proven to be a colossal failure. This system was supposed to be our silver bullet against counterfeit tobacco, but it’s clear that it’s not living up to its expectations.
The illicit cigarettes being sold in southern Punjab, however, lack both the T&T stamps and the graphic health warnings they are legally required to carry, demonstrating the ease with which the law is being violated, with law enforcement agencies failing to do the minimum required of them by conducting raids and seizing these illegal products.
