The share of illicit cigarettes trade in Pakistan is recorded around 18 percent which officials said could be reduced further by ensuring implementation of the track and trace system across the board.
Many independent research studies suggest that multinational companies have been trying to exaggerate the volume of illicit cigarettes in the country to 40 to 42 percent to force the government to withdraw the recent hike in Federal Excise Duty (FED) on the cigarettes.
Anti-tobacco activists have advised the government against falling in the trap of the multinational tobacco companies which have been lobbying to see a reduction in taxes on cigarettes in the upcoming federal budget.
They said the government was expected to collect around 200 billion rupees in taxes from the tobacco companies this fiscal year after jacking up the taxes against the tax collection of 148 billion rupees the previous year.
They said multinational companies have been pushing the same 40 to 42 percent illicit data in the market for the last many years without any credible source or research study. The last year, they also run paid campaigns in the media with the same number. The multinationals fed to Federal Board of Revenue (FBR) the same numbers before the disastrous introduction of three tier system, and they fall for it, resulting in loss of billions of rupees in the revenue.
The activists said that curbing sales of illicit cigarettes in the market comes under enforcement and should not be handled with tax policy. They urged the government to implement track and trace system across the board with better border management to discourage smuggling of cigarettes in Pakistan.
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