LAHORE - In the year 2012, 66.5 billion cigarettes consumed in 11 Asian countries were smuggled. With 86.3%, the domestic smuggled cigarette volumes and consumption of illegal cigarettes were highest in Pakistan whereas the Non-Domestic smuggled was 13.7%. This scenario resulting in Tax Revenue losses of about more than $250 million in 2012 only. These were the outcomes of the study, “Asia-11 Illicit Tobacco Indicator 2012” conducted by Oxford Economics recently.

Illicit trade manifests itself in three major and interrelated ways: smuggled, counterfeit and local tax evaded products. It is a global phenomenon, covering all continents and high and low income countries alike. Cigarettes, being highly taxed, easy to transport, and possessing a lucrative risk to reward ratio, are among the world’s most illegally trafficked goods.

The study “Asia-11: Illicit Tobacco Indicator 2012” conducted by Oxford Economics, is the first quantitative benchmark for governments in the region to track and understand the problem. The study covered Australia, Brunei, Hong Kong, Indonesia, Malaysia, Pakistan, Philippines, Singapore, Taiwan, Thailand, Vietnam, and demonstrates that illegal tobacco significantly impacts developed and developing countries alike - occurring in jurisdictions with both high and low tax and price levels, as well as in those with strong reputations for law and order.

As per the published study; in Pakistan, the consumption of illicit cigarettes is 25.4%. It is important to highlight that these illicit cigarette sales focus on minors who cannot buy products legally and on those on low incomes. Illicit distributors also often supply other illicit products such as alcohol, drugs and firearms. Where there is a good distribution chain and a ready market for illicit products, the rule of law is undermined and corrupt practices thrive.

The domestic illicit consumption makes up 21.9% out of the 25.4% of the total illicit consumption in Pakistan; making the country as a market of consuming about 19 billion domestic duty-non-paid cigarettes, which is the highest amongst the 11 surveyed countries. However currently the Non-Domestic Illicit is only 3.5%;