LAHORE: Pakistan loses almost Rs. 26 billion per year due to illegal tobacco trade, Philip Morris Pakistan Limited (PMPKL) stated in a detailed presentation to Director General I&I (IRS). Quoting, the latest Asia-14 illicit indicator 2013, a report launched by International Tax and Investment Center and Oxford Economics, PMPKL said that illegal tobacco trade is on rise in Pakistan, which is rated fourth in the Asia region in illicit tobacco trade. According to the report the share of Non-Domestic Illicit Consumption increased alarmingly by 14.8pc, from 3.0 billion cigarettes in 2012 to 3.4 billion cigarettes in 2013.
Domestic Illicit Consumption accounts for a significant proportion of total illicit consumption in 2013, contributing 82pc to total illicit consumption of cigarettes that is causing huge economic loss to national exchequer.
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DG I&I (IRS) and his team were briefed that according to International Tax and Investment Center and Oxford Economics report smuggling of cigarettes in Pakistan represents about 18pc of the total illicit market. The rest is due to local manufactures that are not paying taxes.
The DG I&I (IRS) also noted that some local manufactures are selling their brands illegally below the minimum sale price of cigarettes per pack (42) set by the government of Pakistan in Federal Excise Act. Some are offering rebates and even cash-back through cigarette packs to attract customers, which is unlawful as per SRO 1086 of the Ministry of National Health Services, Regulation and Coordination.
