KARACHI: The city is flooded with smuggled cigarettes as an intense campaign by the Pakistan Customs against the illegal trade has so far failed to stop the business thriving at the retail level where the contraband products are easily available despite back-to-back raids and recovery of banned items. This is not only causing losses to the exchequer but also putting local industry under threat, officials and sources said on Friday.
The Anti-Smuggling Organisation (ASO) of the Pakistan Customs’ Model Customs Collectorate recently geared up its operation against the smuggling and contraband products in the country spotting Karachi as the key node in this racket from where, the officials said, supply chain of the illegal business was maintained.
However, their recent efforts and successful raids recovering smuggled cigarettes worth more than Rs150 million within a month had hardly made any dent in the illicit trade at the grassroots level where the variety of such products are widely available at any retail outlet.
The fresh ASO raid, the officials said, was conducted in Boultan Market where three warehouses were found having storage of smuggled cigarettes of foreign brands worth Rs80m.
Jamal Zia of the Pakistan Customs’ Model Collectorate, who was part of the raiding team, said that the team moved on a tip-off and it was its second successful operation in a month in the same area.
The Afghan Transit Trade is seen as one of the major sources of smuggling
“The cigarettes seized from the warehouses were transported to a government facility in four containers,” he said. “You can well imagine the quantity of the smuggled products we have recovered. It’s one of the largest seizures in recent weeks. Investigations may lead to further raids and more seizures. We have found a set pattern in this illegal trade in our findings.”
A few weeks ago the ASO in the same Boultan Market area raided a few warehouses and recovered smuggled cigarettes worth Rs72m. The level of recovery and frequent successful raids suggests a strong network of the illegal trade and its deep roots in the system.
However, despite the raids the sale of the smuggled cigarettes is going unchecked at the retail level.
Over Rs40bn revenue losses
“The country, on an average, records Rs80 billion to Rs85 billion sale of cigarettes,” said an industry source. “The smuggled products make 37 per cent of this sale with an annual increase of six per cent. It causes more than Rs40 billion revenue loss every year and damages the local industry while encouraging illegal channel of business.”
With the stakes so high, the smuggling of cigarettes remains a challenge for the authorities, which despite their off-and-on campaigns, have so far failed to stop the supply line.
The officials believed that this illegal business was in fact thriving under the garb of legal trade.
“The Afghan Transit Trade is one of the major sources of smuggling,” said Zia of Pakistan Customs. “Similarly, other channels add up to increase the volume. But, for the last few months, we have geared up operations and we firmly believe that with the success rate we are witnessing, it will start producing desired results. Better coordination among the institutions and timely action would be the key to our success.”
Published in Dawn, June 13th, 2020