Pakistan continues to lose staggering amounts of revenue every year due to the unchecked growth of the illicit cigarette trade. Current estimates suggest that this black market drains more than Rs415 billion annually from the national exchequer, funds that could otherwise be invested in education, healthcare and infrastructure to improve the lives of millions.
The scale of this revenue loss underscores the urgent need for stronger enforcement against tax evasion in the tobacco sector. While legal, tax-compliant companies contribute nearly all of the sector’s government revenue, illicit operators continue to thrive, selling untaxed products well below the minimum price and evading regulatory oversight.
Every rupee lost to illicit trade is a rupee denied to public welfare. By closing these loopholes and strengthening enforcement, Pakistan can unlock billions in additional revenue to fund critical social projects and long-term economic development.
Unless decisive action is taken to curb this illicit market, Pakistan will remain unable to fully realise the developmental benefits of its tax policies or build a self-sustaining economy.
Usama Ghulam Rasool
Karachi
