Pakistan lay-offs down to tax-led illegal trade

Philip Morris Pakistan (PMPK) is laying off 141 employees from its purchasing and processing departments but says that it is committed to continuing to operate in Pakistan, according to a story in The Nation.

PMPK, formerly Lakson Tobacco, apparently told the paper that the decision to axe the employees had been taken as a result of an unprecedented rise in Pakistan’s illegal cigarette trade that had seriously impacted legal sales.

The reduction in legitimate sales had led to a decline in the company’s leaf purchasing and processing operations, which had necessitated a reorganization. The Nation quoted sources in the commerce ministry as saying that, with high taxes in place, it was not possible for the company to compete with brands that evaded taxes and that therefore were more affordable than were taxed cigarettes, and that made a ‘mockery of pictorial health warning laws’.

PMPK managing director Alejandro Paschalides described the decision to lay off the employees as having been extremely difficult yet necessary.

“Due to significant growth of illicit cigarette trade in the country, we have to review our plans and operations to ensure we are best positioned for future growth,” he was quoted as saying. “We understand that this is difficult news for our employees, particularly those who are directly impacted. We will provide them with support and assistance during this time and we are committed to ensuring that they are treated fairly and with respect. We genuinely appreciate the contributions that each and every employee has made over the years”.

PMPK remained committed to operating in Pakistan, he added.