LAHORE: Pakistan is losing billions of rupees in annual excise revenue due to a large-scale and organised smuggling of internationally popular cigarette brands into Pakistan via Afghanistan.
A report by Tobacco Farmers Welfare Association (TFWA) estimates an annual loss in revenue of more than Rs40billion due to illicit cigarette trade. The use of smuggled brands like Benson & Hedges, Dunhill, Marlboro, Pine and other cigarettes is increasing among Pakistani youth.
Although big tobacco firms continue to increase their revenues yet Pakistan is suffering major economic losses. These smuggled brands are wreaking havoc on the Pakistani economy and can easily be identified as being sold in the market without any pictorial health warning and do not have ‘Made in Pakistan’ stamp on them.
The tobacco smuggling network operates under the Afghan Transit Trade (ATT) Agreement, which was signed between the landlocked country of Afghanistan and Pakistan in 1965 with a view to providing Afghanistan with port access. As per agreement, goods bound for Afghanistan are allowed to be transported from the ports of Karachi and Bin Qasim to Afghanistan via northern border towns of Torkham in KP and Chaman in Balochistan.
This facility provided to Afghanistan is being misused as goods destined for Afghanistan are either pilfered inside Pakistan or are smuggled back into the country after reaching Torkham or Spin Boldak in Afghanistan.
In 1996, the Pakistani government had banned the import of tobacco along with 16 other items to Afghanistan under the ATT; however as per agreed customs procedures under the 1965 agreement, goods declared by an Afghan importer as being for transit to Afghanistan are not checked or verified at the Karachi port. Other than that, there is no scanning facility available at the ports that can thoroughly check larger containers carrying transit goods worth billions of rupees. As stated in the Frameworks Alliance Report of 2010, there are reports of goods being pilfered before they cross over into Afghanistan.
Customs officials in Pakistan are of the view that measures taken by them such as comprehensive field paperwork, sealing of consigned goods, shipment of transit goods in special railway wagons and checking shipment invoices at several points eliminate chances for en route diversions.
But this is a fact that despite elaborate procedures, en route smuggling under the ATT is not inconsequential.
These smuggled brands, mostly of popular foreign tobacco companies, like British American Tobacco (BAT) and Phillip Morris International (PMI), are sold in Karkhano, the main market and the nerve center of contraband trade, situated in the west of Peshawar.
As per report of Framework Alliance, “The overproduction of tobacco, systematically promoted by tobacco companies, leads to competition among growers. The growers with small land holdings get sidelined and are forced to sell their crop at lower prices due to pressure from multinational corporations (MNCs).”
The report also cites a formal letter by Anjuman-e-Kashtkaran Tobacco (growers’ body) in KP accusing the regulatory body of favouring the tobacco companies while fixing prices and dealing with other matters.
Already Pakistani farmers receive extremely less amounts in South Asia for their best quality crop due to monopolistic character of the MNC.
