Authorities intensify enforcement as new report highlights масштаб losses and widespread illicit cigarette consumption across Pakistan
ISLAMABAD: Pakistan has decided to launch a nationwide crackdown on the sale of illegal cigarettes in coordination with provincial governments, aiming to curb massive revenue losses and strengthen tax enforcement.
Minister of State for Finance Bilal Azhar Kayani announced the move while addressing a ceremony for the launch of a research report by Oxford Economics. He emphasized that strict action would be taken across provinces to eliminate the illegal cigarette trade, which has become a significant economic challenge.
According to the report, Pakistan faces annual losses ranging from Rs270 billion to Rs300 billion due to illicit cigarette sales. Officials say the unchecked trade not only undermines the national exchequer but also discourages tax compliance and weakens the documented economy.
Kayani noted that Prime Minister Shehbaz Sharif is personally overseeing tax reforms to boost revenue collection. He added that enforcement of the track and trace system in the tobacco sector would be strengthened, while several illegal manufacturing units have already been shut down. Raids against retailers involved in selling illicit products are also ongoing.
The report revealed that 54 percent of cigarettes sold in Pakistan are illegal, with 5.43 billion illicit cigarettes sold in 2025 alone. It further highlighted that gaps in tax policy and enforcement have fueled the growth of the black market, especially after significant increases in excise duties led consumers toward cheaper, untaxed alternatives.
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