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Tag: Pakistan

  • 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.

  • Pakistan’s Effective Enforcement Welcomed by PMI

    Pakistan’s Effective Enforcement Welcomed by PMI

    Philip Morris Pakistan Limited said it welcomed nationwide enforcement actions targeting the illicit cigarette trade, stating the crackdown would strengthen the documented economy, improve revenue recovery, and support fair competition for tax-compliant businesses. The company said enforcement operations during fiscal year 2025–26 led to seizures of illicit cigarettes and raw materials equivalent to about 17 billion sticks—estimated at nearly 40% of the illegal market—following strategic direction from Shehbaz Sharif to the Federal Board of Revenue and provincial authorities. During a recent visit to Pakistan, Marco Mariotti, president CIS and Central Asia at Philip Morris International, said sustained enforcement is critical for revenue collection and market compliance, noting illicit trade is estimated to cost Pakistan roughly Rs300 billion ($1.1 billion) annually.

  • Pakistani Tobacco Growers Want FBR Raids Stopped

    Pakistani Tobacco Growers Want FBR Raids Stopped

    Tobacco growers and traders in Pakistan called on the government to halt Federal Board of Revenue raids and reduce what they describe as unjust taxes during a convention held in Swabi yesterday (May 4). Participants alleged harassment during enforcement actions and demanded the withdrawal of law enforcement personnel from tobacco processing units, while also calling for interest-free loans and more supportive policies for farmers. Representatives from multiple political parties attended the gathering, where participants also discussed potential actions, including blocking a major motorway, to press their demands.

  • Survey Says Pakistan’s Tobacco Control Not Working

    Survey Says Pakistan’s Tobacco Control Not Working

    A nationwide survey in Pakistan found widespread non-compliance in the cigarette market nearly four years after the introduction of the Track and Trace System. Conducted across 1,520 retail outlets in 19 districts, the study found that only 22 of the 477 identified brands in circulation were consistently compliant, with 455 failing to meet at least one regulatory requirement, including missing tax stamps, health warnings, or printed retail prices.

    The survey also found that 392 brands were being sold below the government’s minimum price of PKR 162.25 ($0.58) per pack, with some as low as PKR 50 ($0.18), indicating a significant presence of untaxed and non-compliant products. Both smuggled and locally produced duty-unpaid cigarettes were widely available, with higher non-compliance rates in rural areas. The findings point to ongoing challenges in enforcement, monitoring, and market control, despite the formal rollout of digital tracking systems.

  • Pakistan Investigating Undocumented Acetate Tow Issues

    Pakistan Investigating Undocumented Acetate Tow Issues

    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.

  • BAT Calls Pakistan Largest Illicit Cigarette Market

    BAT Calls Pakistan Largest Illicit Cigarette Market

    British American Tobacco (BAT) says Pakistan has become the world’s largest illicit cigarette market, with illegal products accounting for roughly 55–58% of consumption. Simon Trussler, BAT’s Group Head of International Trade and Fiscal Affairs, said steep tax increases in recent years have widened the price gap between legal and illicit cigarettes—now around half the price—driving consumers toward untaxed products while overall consumption remains broadly unchanged at about 80 billion sticks annually.

    BAT said higher taxes have failed to deliver expected revenue gains and instead have fueled domestic illicit production, which accounts for the majority of illegal supply. The company called for a more stable excise policy alongside sustained enforcement across the supply chain, noting recent seizures and factory closures as signs of increased government action.