Pakistan’s tobacco industry is facing mounting pressure as illicit cigarettes tighten their grip on the market, eroding government revenue and undermining the legitimate sector, according to experts. Macroeconomic analyst Osama Siddiqui said the country needs a robust track-and-trace system and stronger coordination among enforcement and revenue authorities to monitor production, distribution, and retail.
“Without a decisive crackdown on the illicit tobacco trade, Pakistan’s legal industry will continue to suffer while the black market thrives unchecked,” Siddiqui said. “A modernized supply chain and sustained enforcement are the only ways to reclaim lost revenue and restore market fairness.”
Recent estimates indicate that illicit cigarettes now make up more than half of total sales, costing the national exchequer over Rs 415 billion ($1.5 billion) annually. The smuggled, untaxed, and/or products sold below the legal minimum price continue to weaken the formal industry’s competitiveness while fueling organized black-market networks, experts say.