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Tag: Pakistan

  • Pakistan Pressed to Investigate Cigarette Smuggling Ring

    Pakistan Pressed to Investigate Cigarette Smuggling Ring

    ACT Alliance Pakistan called for a nationwide investigation into what it describes as a highly organized network smuggling Afghan-linked cigarette brands, including Milano and Mond, into Pakistan. The group alleges the illicit trade is costing the government billions of rupees in lost tax revenue annually while funding cross-border money laundering and organized criminal activity. According to ACT Alliance, the cigarettes are smuggled through Balochistan and distributed across Pakistan using sophisticated logistics networks, sometimes concealed within shipments of legitimate goods.

    The organization urged Pakistan Customs, the Federal Board of Revenue, and law enforcement agencies to dismantle the alleged smuggling and financial networks, arguing the issue has evolved beyond tax evasion into a broader national security concern.

  • Pakistan Warns Companies Against Delaying Tobacco Purchase

    Pakistan Warns Companies Against Delaying Tobacco Purchase

    The Pakistan Tobacco Board (PTB) warned tobacco companies and dealers to immediately begin purchasing flue-cured Virginia (FCV) tobacco or face enforcement action under the PTB Ordinance of 1968. In a notice to the industry, the board said companies had failed to open buying centers within the July 8-11 procurement window established under the Marketing Control Rules, 2016, putting them in violation of the regulations.

    PTB directed companies to begin purchases and submit compliance reports within three days. The warning follows last year’s delayed buying season, when some manufacturers and dealers waited until tobacco was declared surplus before purchasing at lower prices, a practice growers say resulted in significant financial losses.

  • Pakistani Growers Protest ‘Violation’ of Tobacco Purchase Agreement

    Pakistani Growers Protest ‘Violation’ of Tobacco Purchase Agreement

    Tobacco growers in Pakistan’s Khyber Pakhtunkhwa province accused the local management of a multinational tobacco company of failing to honor procurement agreements by refusing to purchase leaf that farmers say meets agreed quality standards. Protesting outside the Pakistan Tobacco Company’s depot in Charsadda, growers claimed the alleged refusal has left hundreds of farming families facing financial hardship during the marketing season and warned that continued purchasing delays could discourage future tobacco cultivation.

    Farmer representatives are calling on provincial and federal authorities to intervene, investigate the dispute, and ensure procurement contracts are honored, while threatening to escalate demonstrations if the company does not resume purchases.

  • Pakistani Tobacco Farmers Question Excessive Taxes

    Pakistani Tobacco Farmers Question Excessive Taxes

    Pakistan’s tobacco industry is raising concerns over the sector’s growing tax burden and the use of development funds collected from tobacco producers, arguing that multiple levies are increasing costs without delivering promised benefits to farming communities. Industry officials highlighted three major taxes — the Federal Excise Duty (FED), Federal Tobacco Cess (FTC), and Tobacco Development Cess (TDC) — noting that the advance FED on green leaf tobacco currently stands at Rs390 ($1.40) per kg, while the TDC in Khyber Pakhtunkhwa has risen from Rs6 per kilogram in 2023 to Rs27.5 ($0.02 to $0.10) per kg.

    Although the TDC is legally earmarked for infrastructure, agricultural development, and farmer welfare in tobacco-growing districts, industry representatives say an estimated Rs6 billion ($18 million) collected over the past two years has produced little visible improvement, prompting calls for greater transparency and accountability in how the funds are allocated and spent.

  • Pakistani Growers Reject Move to Scrap Price Mechanism

    Pakistani Growers Reject Move to Scrap Price Mechanism

    Tobacco growers in Pakistan have urged the federal Ministry of National Food Security to consult farmers before abolishing the weighted average price (WAP) mechanism used to determine the minimum indicative price (MIP) for tobacco. Speaking at a press conference in Swabi, growers and industry representatives argued that the government had presented misleading figures to the federal cabinet, overstating farmers’ profits to justify proposed amendments to the Tobacco Marketing Rules, 2016, and Martial Law Order 487.

    Former Pakistan Tobacco Board director Muhammad Ayaz Khan said rising production costs, lower yields caused by adverse weather, and reduced purchases by tobacco companies meant growers earned only marginal profits during the 2024-25 season. Farmer representatives also said many growers remain burdened with debt after companies declined to purchase lower-grade tobacco and called on the government to conduct an independent survey before making changes to the pricing system.

  • Pakistani Tob. Growers Call to End Export Tax

    Pakistani Tob. Growers Call to End Export Tax

    Tobacco growers, traders, and industry representatives in Pakistan called for the immediate withdrawal of the Rs390 ($1.40) per kilogram tobacco export tax and a broader review of sector taxation, arguing current policies are reducing farmer incomes and export competitiveness. Speaking alongside political leaders including Asad Qaiser, industry representatives said government revenue from the sector had fallen from Rs294 billion ($1.1 billion) to Rs165 billion ($594 million) following higher taxes, while tobacco prices paid to growers were reportedly around Rs180 ($0.65) per kilogram lower than a year earlier.

    The group also opposed a proposed minimum indicative price of Rs525 ($1.89) per kilogram for Virginia tobacco in the 2026-27 budget, called for a third tobacco tax tier to support domestic manufacturers, and urged authorities to ease regulatory pressure on growers, dealers and exporters.

  • Pakistani Farmers Slam 11 Different Tobacco Taxes

    Pakistani Farmers Slam 11 Different Tobacco Taxes

    Tobacco growers and exporters in Pakistan’s Khyber Pakhtunkhwa province have criticized what they describe as a “tax upon tax” regime on tobacco, claiming the sector is subject to 11 separate taxes from cultivation to sale. They say provincial charges include a Tobacco Cess of Rs 27.50 ($0.10) per kg and an additional Rs 50 ($0.18) per kg levy, alongside federal and other taxes that they argue reduce export competitiveness.

    Industry representatives claim tobacco supports thousands of families and is a key provincial crop, but say it is being disproportionately taxed compared with other agricultural sectors, with calls for the removal of what they describe as discriminatory levies affecting production and exports.

  • Pakistan Taps into Industry for Proposals to Stop Illicit Trade

    Pakistan Taps into Industry for Proposals to Stop Illicit Trade

    Pakistan’s commerce ministry reviewed proposals from the tobacco industry focused on taxation and illicit cigarette trade ahead of the country’s federal budget announcement scheduled for June 12. The discussions with Pakistan Tobacco Company representatives took place as the government seeks to expand its tax base, strengthen revenue collection, and reduce undocumented economic activity under its IMF-backed reform program.

    Industry stakeholders emphasized the impact of illicit cigarette sales on tax compliance and market competition, while government officials reiterated priorities around improving enforcement and formalizing the economy. The review comes as Pakistan prepares new fiscal measures aimed at balancing revenue generation with investment and growth objectives in the upcoming budget cycle.

  • Pakistani Tobacco Traders Threaten Company Blocks

    Pakistani Tobacco Traders Threaten Company Blocks

    Tobacco traders in Pakistan’s Khyber Pakhtunkhwa province threatened to block multinational companies from purchasing tobacco leaf if tax-related disputes with federal and provincial authorities are not resolved. At last week’s meeting of the Tobacco Traders’ Association Khyber Pakhtunkhwa in Swabi, representatives from key growing districts warned they would escalate action unless negotiations begin with the government and political stakeholders.

    Traders are demanding restoration of more than 5,000 grower contracts, reinstatement of last year’s procurement quota, and greater intervention by the Pakistan Tobacco Board. They also called for changes to the tax regime, alleging excessive taxation and harassment by enforcement officials.

    The association further urged the removal of Rangers from Green Leaf Threshing centers and broader tax relief for the sector, arguing that reforms are needed to support cultivation and exports.

  • Pakistan Intensifies Illegal Tobacco Crackdown

    Pakistan Intensifies Illegal Tobacco Crackdown

    Pakistan continues to step up enforcement actions against illicit cigarette manufacturing and non-duty-paid tobacco products, with advocacy group ACT Alliance Pakistan praising recent government efforts led by the Federal Board of Revenue (FBR). The group said ongoing operations targeting smuggled brands, counterfeit tax stamps, and violations of the Track and Trace Systems are aimed at protecting tax revenue and formal businesses, estimating that the illegal cigarette trade costs the country more than Rs300 billion ($1.1 billion) annually.

    ACT Alliance Country Director Mubashir Akram said sustained enforcement is essential to prevent tax evasion networks from undermining the formal economy, adding that illicit trade is increasingly structured across manufacturing, distribution, and retail channels. He also warned that regulatory pressure must be consistent rather than episodic and called for stronger coordination among enforcement agencies, including Customs, Inland Revenue, and provincial authorities. The group further argued that tackling illicit tobacco is linked to broader investor confidence, stating that perceptions of enforcement effectiveness influence both domestic and foreign investment decisions.