ISLAMABAD: The country suffers an annual loss of more than Rs24 billion because of illegal tobacco trade, and sustained and coordinated enforcement efforts are needed to solve the problem, according to a report.

The report by a US-based research agency, Nielsen, says that two tobacco manufacturers contribute 99.3 per cent of the revenue generated from the industry.

It claims that legitimate companies are subjected to taxation and duties but there is no defined system of check and balance against the illicit cigarette network across the country.

“There is a need to execute a comprehensive and holistic strategy to tackle illicit trade in cigarettes. Multiple laws already exist and, if enforced rigorously, can bring down the incidence of the illicit segment and help the government in raising more revenue.”

Meanwhile, an official of a cigarette company said smuggled cigarettes were available in the market despite the presence of the intelligence directorates general of the customs department and the Federal Board of Revenue (FBR).

“If FBR effectively checks non-duty paid items, smuggled items would not be available openly in the federal capital,” the official said, adding that the main reason for the failure to control cigarette smuggling was lack of efforts by the agencies. The official claimed that only superficial actions were being taken by the FBR and the authorities were not conducting raids at wholesale markets.

The industry players attributed the increase in smuggling to the high federal excise duty that had raised the prices -- the average price of a lower category duty-paid pack of cigarettes has increased from Rs38 in 2013 to Rs65.

Published in Dawn, February 18th, 2016