The illegal cigarette trade in Pakistan surged to 42.4% of the market, leading to major losses for the national exchequer, according to an ARY News report. The market for illicit cigarettes has grown 171% since 2019, outpacing the 154% increase in taxes and duties on legal cigarettes. The highest shares of illegal consumption were recorded in Lahore, Kasur, Sheikhupura, and Nankana.
Experts attribute the growth in smuggling and illegal sales to the rising Federal Excise Duty on legal cigarettes, which has pushed consumers toward cheaper, unregulated alternatives.
