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Tag: Pakistan

  • Weak Illicit Cigarette Enforcement Drains $1.1B in Pakistan

    Weak Illicit Cigarette Enforcement Drains $1.1B in Pakistan

    Pakistan is losing more than Rs300 billion ($1.1 billion) each year to the illegal cigarette trade due to weak enforcement against illicit manufacturing and smuggling, according to macroeconomic analyst Osama Siddiqui. He said effective action in the tobacco sector could significantly reduce the country’s widening revenue gap.

    The shortfall comes as fiscal pressures mount. The Federal Board of Revenue missed its March target by Rs185 billion ($666 million), collecting Rs1,182 billion ($4.3 billion) against a goal of Rs1,367 billion ($4.9 billion) — just a 6% year-on-year increase versus the 21% growth required. Meanwhile, the government is trimming development spending to fund fuel relief, while facing pressure from the International Monetary Fund to withdraw tax exemptions.

    Siddiqui argued that instead of raising taxes on already compliant sectors, authorities should prioritize curbing tax evasion in tobacco through stricter action against illegal production and smuggling, full implementation of track-and-trace systems, and tighter retail monitoring. He said plugging these leakages could create fiscal space for public relief and development spending at a time of heightened economic strain.

  • Pakistan Arrests Two for ‘Procedural Violations’ in Selling Tobacco Machines

    Pakistan Arrests Two for ‘Procedural Violations’ in Selling Tobacco Machines

    Two people were arrested in Swabi, Pakistan, after a raid by the Federal Board of Revenue over the alleged unlawful removal of tobacco manufacturing machinery, in a case that has drawn competing claims from authorities and industry representatives. Officials from RTO Peshawar say the action was taken under the Federal Excise Act, 2005, which requires prior excise approval before any cigarette production equipment is relocated, due to the risk that machinery could be used for untaxed manufacturing. An FIR was lodged following the raid, and two “owners,” along with an excise manager, were detained.

    The company disputes the allegations, saying the machinery was surplus equipment legally sold on March 19 to a registered buyer, with Rs1.8 million ($6,480) paid in sales tax, and those arrested were employees, not owners. Management argues that the transaction complied with applicable rules and that excise officials acted unjustly, causing reputational harm. Industry figure Iqbal Khan Shewa also criticized the arrests, suggesting the action could negatively affect tobacco growers and associated livelihoods, while authorities maintain the case centers on procedural excise violations rather than the commercial sale itself.

  • Pakistan Probes Theft of $900K of Cigarettes From FBR Warehouses

    Pakistan Probes Theft of $900K of Cigarettes From FBR Warehouses

    A Senate sub-committee in Pakistan called on relevant authorities to explain the theft of 2,828 cartons of cigarettes worth Rs250 million ($900,000) from Federal Board of Revenue (FBR) warehouses in Swabi and Mardan. Chaired by Senator Saifullah Abro, the panel directed the FBR and Federal Investigation Agency (FIA) to identify those responsible and ensure recovery of the stolen goods. The committee criticized the absence of senior FIA officials during proceedings and noted prior incidents of cigarette theft, including one in April 2024, raising concerns that consignments are being specifically targeted.

    Officials reported that CCTV cameras were installed in all FBR godowns as of January 14, and a new SOP was introduced to strengthen monitoring. Ten officers have been suspended, while others with potential links to the business community were transferred. The panel also highlighted weak coordination between the FIA and Khyber Pakhtunkhwa Police, instructing authorities to implement stronger security measures and provide consolidated records of all godowns since 2012 to prevent future theft and smuggling activities.

  • Pakistan Considering Vape Ban

    Pakistan Considering Vape Ban

    In Pakistan, the Senate Standing Committee on National Health Services, Regulations and Coordination reviewed a private member’s bill this week aimed at banning vapes. The committee examined the Electronic Nicotine Delivery Systems (Regulation) Bill, 2025, discussing its provisions in detail. While members acknowledged the intent behind the legislation, the ministry highlighted objections from stakeholders and recommended a complete ban on the use of vapes, citing concerns that these devices could be misused to facilitate drug intoxication.

  • Pakistani Growers Seek Help Over Issues with Tobacco Companies

    Pakistani Growers Seek Help Over Issues with Tobacco Companies

    The chairman of the Tobacco Growers Association in Pakistan’s Khyber Pakhtunkhwa province, Daud Jan Khan, said 2026 had the potential to be one of the worst years for growers, accusing national and multinational purchasing companies of exploitative practices and alleging that the Pakistan Tobacco Board (PTB) failed to enforce agreements under Martial Law Order 487 or ensure proper use of cess funds for tobacco-growing regions. Khan led a seven-member delegation that met with Governor Faisal Karim Kundi, who, after the meeting, pledged to address farmers’ concerns on a priority basis.

    Khan also claimed exports declined due to harassment of small dealers by tax authorities and said the governor promised to convene a joint meeting with companies and PTB officials after Eidul Fitr to seek solutions.

  • Pakistani Governor Calls for More Revenue to Tobacco Farmers

    Pakistani Governor Calls for More Revenue to Tobacco Farmers

    Faisal Karim Kundi, governor of Khyber Pakhtunkhwa, said the province—Pakistan’s largest tobacco producer—does not receive a fair share of industry profits and tax revenues, despite its significant contribution to national output. Speaking during a meeting at Governor House with Pakistan Tobacco Board Secretary Fakharuddin Khan, officials noted that tobacco is cultivated across districts including Swabi, Mardan, and Charsadda, generating Rs320 billion ($1.2 billion) annually and supporting around 1.2 million livelihoods nationwide, while contributing Rs483 billion ($1.7 billion) in Federal Excise Duty and Sales Tax in FY2024-25. The governor called for greater reinvestment in the province, stronger farmer protections, transparent procurement, adoption of modern farming practices and expanded exports to bolster both provincial and national economic stability.

  • Pakistan Bill Would Treat Vape Like Cigarettes

    Pakistan Bill Would Treat Vape Like Cigarettes

    Pakistan’s Senate Standing Committee on National Health Services approved the Electronic Nicotine Delivery Systems (Regulation) Bill, clearing the way for its introduction in the Senate as authorities move to curb rising youth vaping, particularly in Islamabad. The bill would impose strict controls on the import, sale, marketing, and use of e-cigarettes, including a ban on sales within 50 meters of schools and colleges, a minimum purchase age of 18, and a prohibition on vape use in public transport, government buildings, parks, and other shared spaces.

    The proposed legislation would regulate vapes similarly to traditional tobacco products, banning all advertising—especially marketing aimed at minors—and requiring product standards such as nicotine caps of 40 mg/ml, child-resistant packaging, health warnings, and mandatory age verification for e-commerce sales. Penalties include fines of up to Rs 50,000 ($175) for first offenses, with escalating sanctions for repeat violations and smuggling. The bill is undergoing inter-ministerial review before formal Senate consideration, signaling tighter oversight for the nicotine and vaping market in Pakistan.

  • Pakistan Seizes $68M in Illicit Raw Tobacco

    Pakistan Seizes $68M in Illicit Raw Tobacco

    Pakistan’s Regional Tax Office (RTO) Peshawar sealed several warehouses in District Mardan, Khyber Pakhtunkhwa, and seized non-duty-paid raw tobacco as part of a tax evasion crackdown. Authorities estimate the operation exposed tax evasion worth Rs19 billion ($68.4 million), marking a major enforcement action by the Federal Board of Revenue (FBR).

    According to an official statement, the RTO confiscated around 2.75 million kg of raw, non-duty paid tobacco from the Khyber Tobacco Company. The evaded Federal Excise Duty on the recovered stock is estimated at Rs1.1 billion ($4 million), and further action is expected against the company.

  • Pakistan’s Pouch Market Reshaping Tobacco Landscape

    With a smoking rate of 19.5% and high instances of smoking-related illnesses, Pakistan is beginning to embrace the shift to lower-risk alternative products, including a quickly expanding nicotine pouch market that is not only good news for health advocates but is creating business opportunities as well.

    Philip Morris (Pakistan) Limited recently began local production of ZYN at its Sahiwal facility, following British American Tobacco’s early entrance with Velo in 2019, solidifying Pakistan as a key growth market for modern oral nicotine products. Industry momentum is being driven by strong demand from adult tobacco users seeking alternatives to cigarettes and traditional oral products such as paan, naswar, and gutka. A recent LMIC case study cited Pakistan as having the world’s largest consumer base for nicotine pouches, noting toxicant levels far lower than in conventional oral tobacco.

    Local production is boosting jobs, tax revenue, and regulatory oversight, but authorities are expected to weigh stricter age controls, product standards, and monitoring as the category scales.

  • Pakistan Seals Two Cigarette Factories for Illicit Trade

    Pakistan Seals Two Cigarette Factories for Illicit Trade

    Pakistan’s Federal Board of Revenue (FBR) sealed the manufacturing units of M/s Indus Tobacco Company and M/s Souvenir Tobacco Company in Mardan for “producing and circulating non-duty-paid and non–track-and-trace-stamp (TTS) cigarettes,” marking a historic enforcement action against politically connected operators, according to The Dawn. During raids, 62 cartons of illegal cigarettes were seized, and the manufacturing machinery of both companies was locked. Authorities confirmed that the crackdown targets the growing illicit cigarette market, which is estimated to cost Pakistan Rs. 250–300 billion ($900 million to $1.1 billion) annually in lost revenue.

    The operations were conducted by the Directorate of Intelligence & Investigation–IR Peshawar and officers from the Regional Tax Office Peshawar despite resistance from armed personnel linked to prominent local politicians. According to Pakistan’s Business Recorder, the factory closings happened “despite extraordinary pressure by a prominent political personality,” and included “apparent threats to the FBR officials.”

    The actions form part of a multi-layered national enforcement plan, backed by the Prime Minister and the Pakistan Army, aimed at dismantling illegal cigarette production, strengthening monitoring systems, and disrupting illicit supply chains. Over 200 FBR monitors and 120 Pakistan Rangers personnel have been deployed nationwide to oversee production, ensure lawful removal of goods, and prevent illicit manufacturing at Green Leaf Threshing units. The FBR emphasized that no political pressure would deter the enforcement of tax laws, highlighting the unprecedented sealing of factories previously protected by political influence.