Illegal trade reduced

Pakistan is the ‘top’ country in Asia when it comes to the illegal cigarette trade, according to a story in The News citing figures from a new report.
But the good news is that the consumption of illicit cigarettes declined in the country in 2017.
The country’s annual illegal trade in cigarettes is estimated by Oxford Economics at 32.6 billion cigarettes, or 41.9 percent of the total cigarette trade.
The Oxford Economics report, Asia Illicit Tobacco Indicator 2017: Pakistan, was made available to the media by Philip Morris International on Friday.
It said that Pakistan was losing more than Rs50 billion in taxes to the illegal trade in the country.
Total consumption (licit and illicit) was estimated at 77.8 billion cigarettes in 2017, down by 10.3 percent on that of 2016. Of this total, an estimated 58.0 percent was licit domestic cigarettes, 0.1 percent was licit non-domestic cigarettes, and 41.9 percent was illicit cigarettes.
Domestic illicit cigarettes accounted for nearly three-quarters of all illicit cigarettes consumed in 2017, the data showed.
The consumption of illicit cigarettes declined by an estimated 14.0 percent in 2017 to 32.6 billion cigarettes, underpinned by an 11.4 percent decline in the consumption of domestic illicit cigarettes and a 20.5 percent fall in the consumption of non-domestic illicit cigarettes. ‘This is the first time since 2013 that illicit consumption has fallen in Pakistan,’ the report said.
The decline in the consumption of illicit cigarettes was said to have coincided with a series of regulatory and enforcement initiatives.
‘In January 2017, the Federal Board of Revenue (FRB) constituted a joint committee for the monitoring, vigilance, and scrutiny of the cigarette/tobacco sector in response to the rise in illicit consumption, and in recognition of the links between tobacco smuggling and financing terrorism,’ the News reported.
‘The committee, known as the Inland Revenue Enforcement Network (IREN), was tasked with monitoring and developing strategies to combat the illegal cigarette trade. In the first year of operation, IREN seizures amounted to 1.63 billion non-duty-paid cigarettes and raw tobacco. In July 2017, the FED (federal excise duty) was restructured with the introduction of a third low-tax-tier in an attempt to encourage producers of illicit tobacco to formalise and become better regulated.’