Analysts estimate that two out of every five cigarettes supplied Sale of illegal cigarettes in Pakistan are obtained through evading taxes, ranking Pakistan among the top Asian nations for the illegal cigarette trade, the speaker said.
The national exchequer suffers an annual loss of Rs 100 billion due to the illegal cigarette trade. According to Ashraf, a track-and-trace system has been implemented to eradicate tax evasion from five major industries: tobacco, cement, sugar, fertiliser, and petroleum. Tax receipts will rise if this approach is successfully adopted across the board in the tobacco sector. Illegal Trade of Cigarettes Causes Annual Losses of Rs. 1000 Billion to Pakistan.
As Pakistan confronts one of the greatest economic crises in its history, the country’s policymakers and tax officials are focusing their efforts on recovering the maximum amount of revenue from the present taxpayers rather than on tax evaders and the collection of the Gas Infrastructure Development Cess (GIDC).
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Federal Board of Revenue (FBR) figures indicate that the reduction in economic activity and the FX crisis would likely cause tax receipts to fall Rs 170 billion short of the target this fiscal year. In contrast to the aim of Rs7,470 billion, experts predict that the FBR would only be able to collect Rs7,300 billion in taxes.
There is a deficit both internally and externally in the economy. The government’s goal, according to the experts, is to increase income through a mini-budget in addition to hiking the petroleum levy in order to reduce these deficits.
Consumption of cigarettes in Pakistan
Despite the rise in government taxes on cigarettes in Pakistan, there hasn’t been a discernible drop in demand or sales. Out of the 80 billion cigarettes consumed in Pakistan each year, 32.6 billion are consumed illegally. According to estimates, Pakistan’s illicit cigarette industry accounts for around 40% of the country’s total cigarette sales, costing the government’s exchequer Rs80 billion yearly in lost tax revenue.
It is important to note that only two cigarette corporations account for 98% of tax payments, with the remaining 2% of tobacco sales coming from illicit sources. These statistics cast doubt on the government’s position that taxing cigarettes is the only effective strategy to safeguard the public’s health.
Sale of illegal cigarettes increase in Pakistan
With all credit going to illegally supplied cigarette brands that are enabling users to continue consuming less expensive cigarettes, these statistics demonstrate that demand and sales of cigarettes have remained consistent over the years despite the government’s ongoing attempts to discourage smoking. Sale of illegal cigarettes increase in Pakistan and rapidly increasing day by day Pakistan govt have to take action against this heavy consumption of cigarettes in Pakistan.
