A sharp decline in documented imports of acetate tow has raised concerns about growing illicit supply channels and significant tax losses, according to the Business Recorder. Imports fell 53% between 2023 and 2025, dropping from 6.9 million kg to 3.7 million kg, despite stable cigarette production levels of 60–80 billion sticks annually. According to an unnamed industry expert, the gap suggests a substantial shift toward undocumented or smuggled inputs following the imposition of a PKR 44,000 ($158.40) per kg Federal Excise Duty.
Industry sources estimate that the trend has cost the government approximately Rs 300 billion ($1.1 billion) in lost tax revenue and distorted market competition. Legal manufacturers complying with import and tax requirements face increasing pressure as illicit operators expand market share, now accounting for more than half of total sales, Business Recorder said.