Despite tall claims that a special intelligence wing has been formed to curtail smuggled and counterfeit brands, non-paid duty (DNP) cigarettes continue to flood the markets in Khyber-Pakhtunkhwa (K-P).
Wholesalers involved in the business blame authorities, pointing out the presence but lack of implementation of laws.
“If authorities wanted, we would never be able to sell a single stick of the DNP cigarette,” a wholesaler in Firdous market said. He acknowledges the situation but says that this isn’t a “crime against the country”.
He added that cigarettes enter the country through different routes and reach Karkhano, the biggest markets of illegal products. “There are huge stores of such products in Karkhano. They are then transported to other parts of the country without any hurdle.”
While the industry may not be that huge in K-P, authorities find it hard to curtail the small-scale operations. Transporting goods across the border is also easy as law enforcement agencies continue to turn a blind eye.
There are dozens of foreign brands available even without the mandatory pictorial health warning, which is binding on all manufactures in the country including Dunhil, Grand cigarettes, Marlboro, 555, Pine, Lips, Fisher Menthol, Napoil, Maiwand fine tobacco, Macbeth cigarette, ESSE, Wonder classic, Oris, Diplomat among others.
Composition of illegal cigarette consumption (calender year 2012)
Local brands such as Cash, Press, Capstan are also available with prices as low as Rs22 per a pack of 20 sticks.
A regional taxation official in K-P said action was being taken against the illegal sale.
“We have formed a special intelligence wing to take action against the smugglers,” said the official. “So far, we have confiscated several trucks coming into the province through different routes, where the main route is Afghanistan.
The official said that during the period starting July to December 2013, authorities have collected Rs267 million as Federal Excise Duty (FED) and Rs43 million in as General Sales Tax (GST) from local brands. “The regional office is responsible for dealing with local brands. The centre is the one that has to deal with the foreign brands,” he said, citing this as the reason behind the lack of data on collection from foreign brands.
Despite producing premium quality of tobacco, the low revenue is a surprise. However, the official said that local brands’ quality and the “easy” availability of foreign brands hurt sales of the domestic product.
Data provided by the Pakistan Tobacco Company (PTC) shows that six percent is produced in Buner, 38 percent in Swabi, five percent in Mansehra, 25 percent in Mardan and 15 percent in Charsadda. The main local manufacturers of cigarettes are limited to Swabi and Mardan such as Sarhad cigarette industries limited, Mardan, Saleem Tobacco Company, Khyber Tobacco company, Pakistan Tobacco company, Akora Khattak.
Published in The Express Tribune, January 27th, 2014.