ISLAMABAD - Pakistan is facing revenue loss of over Rs24 billion per annum due to the cigarettes illicit trade. One in every four cigarettes in the country is illicit.

This was discussed in a Nielsen report on, “The challenge of illicit trade in cigarettes: Impacts and solutions for Pakistan,” during a workshop conducted by Communication Research Strategies (CRS). According to the report, illicit segment has grown by 43.5% and the tax-paid cigarette volume has declined by 11% during the last six years’ period in Pakistan.

Jawwad Riaz, Senior Manager Nielsen Pakistan, said the price differential between legal and tax-evaded cigarettes is the major challenge the government is facing to curbing the menace of non-availability of level playing field for the legal tobacco industry. “One in every four cigarettes in the country is illicit. Alone in Pakistan, nearly 19.5 billion illicit cigarettes were consumed in the year 2014, out of which 17.3 billion or 89 percent were local non-duty paid. More than two billion cigarettes are smuggled into Pakistan as well and added into the illicit trade each year,” he said.

“Overall, 23.7 percent of the total cigarettes annually sold in Pakistan are illicit. In addition to billions in revenue loss to the government, local non-duty paid cigarettes undermine the country’s public health objectives by giving easy access to youth and encouraging youth smoking  by selling cigarette packs below the minimum tax payable on a cigarette pack. Shortly put, the pervasive illicit cigarette trade continues to grow leaps and bounds”, the report said.