Cigarette smuggling causes loss of billions

FBR comes into action to stem sale of smuggled brands.

ISLAMABAD: Pakistan has lost Rs80 billion worth of duties and taxes in the last five years because of cigarette smuggling and is expected to lose another Rs100 billion in the next five years, says Euromonitor International, a global research agency.

Markets across the country are flooded with smuggled cigarette brands, in the absence of any strict enforcement of laws and regulations.

According to the country’s laws, penalties for the sale of smuggled cigarettes include confiscation of such cigarettes, fine up to Rs50,000, recovery equal to 500% of unpaid taxes and imprisonment up to five years.



The laws make it mandatory that every cigarette pack must have pictorial and textual health warning in Urdu and English, warning against sale to underage people as well as the retail price.

However, smuggled cigarettes do not meet all such requirements. Apart from this, evasion of duties and taxes cause a huge loss to the national exchequer.

Understanding the severity of the issue, the Federal Board of Revenue has come down hard on illegal cigarette traders and has issued a series of warnings over the past few months to check trade in smuggled brands, particularly the Korean brand, Pine.

The government has also ordered action to curb unchecked smuggling. Smuggled brands, particularly the Pine, are being sold openly in the domestic market.

According to officials, the Punjab home minister has written a letter to the Inspector General of Police in an effort to stem the sale of smuggled cigarettes across the province.

The letter takes note of advertisements published by the FBR recently, warning retailers and wholesalers against the sale of smuggled cigarettes.

Published in The Express Tribune, July 17^th, 2013.

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