ISLAMABAD: The regulated tobacco sector has demanded the enforcement of anti-tobacco laws in the country, citing revenue loss and decline of legitimate industry due to the rampant increase in the sale of illicit cigarettes, while criticising the NGOs for not mentioning the illicit market in their anti-tobacco campaigns.
“There is a need to tackle the rising sale of low-priced, non-tax-paid cigarettes in the country; as a result, the regulated industry is witnessing declining sales,” Andleeb Uroos Ahmed, Head of Communications, Philip Morris Pakistan (PMP), said in a news conference.
The PMP team has highlighted that the company has witnessed a decrease of 86 per cent in total income during the financial year January–December 2023, due to high taxes on the regulated cigarettes industry and the price gap against illicit cigarettes.
She added that the massive surge in illegal cigarettes across Pakistan was witnessed after an increase in the federal excise duty (FED) in February ‘23. As a result, the illicit cigarette market share has reached 63 per cent of the total market in Pakistan.
The media was informed that there were three categories of illicit cigarettes on the market: smuggled packets mostly manufactured in the UAE with attractive packaging and a variety of flavours; non-registered local cigarettes; and counterfeit products of registered brands.
“All of these do not pay taxes; that is, their prices were less than half to one-third of the regulated cigarette brands,” Ms Uroos highlighted.
She said that the government has to enforce all the laws of the country on the cigarette industry, and the tax stamps of the track & trace system were introduced to combat illicit tobacco trade, but that too was not being implemented, and cigarette packs with fake tax stamps were openly being sold in the markets.
Responding to a question about the statements by various anti-tobacco organisations that increasing taxes on tobacco products was leading to a drop in smoking habits, she said that these organisations have been misguiding the government through misinformation.
Published in Dawn, April 19th, 2024