ISLAMABAD - The coordinated steps taken by the Directorate General of Customs Intelligence and Directorate General of Intelligence and Investigation (Inland Revenue) will play a key role in controlling the illicit trade of cigarettes in Pakistan, which in 2014, alone, caused to the government the revenue loss of over Rs 24 billion.
Experts say that a study conducted by Nielsen on illicit trade of cigarettes in Pakistan revealed that only two manufacturers contribute an astounding 99.3% to the total revenue generated from the cigarette industry, whereas the illicit manufacturers, who make up almost a quarter of the market, contribute only 0.7% to the total revenue, said a press statement issued here on Wednesday.
The report further disclosed that the manufacturing and distribution of locally manufactured, tax-evaded cigarettes in Pakistan was not a covert activity but this supply chain was well established across the country and was operating seamlessly.
It suggested that in order to prevent this menace from spreading further, there was a need to devise and execute a comprehensive and holistic strategy; measures that can assist in enforcement include establishment of a single, dedicated taskforce, headed by a federal minister, mobile enforcement units at district level, enhancing capacity of Customs and a capacity building workshop for the law-enforcement agency officials.
Well-managed, mobile, enforcement units have the ability to ensure timely response and effective action against the culprits. By bringing the provincial governments on board, the creation of such mobile enforcement units will improve the performance of law enforcement agencies, which would make trade of cigarettes more risky.
Both the directorate generals and Customs have shown good performance by checking evaded cigarettes in a short span of time.
Experts say that the FBR IR and I&I have launched an ambitious country-wide crackdown against duty-evading cigarette manufacturers, including owners of illegal warehouses of cigarettes and tobacco, sellers of smuggled cigarettes , those involved in the business of duty-evaded cigarettes and tobacco. They say that raids will be conducted to confiscate duty-evaded and smuggled tobacco and cigarettes . They add that while these actions have also been taken previously, persistent efforts are required to set a daunting precedent.
Both the directorate generals have conducted raids to nab those traders involved in smuggling cigarettes in the past. These include very notable raids on godowns in the main wholesale markets of Lahore and Karachi, which hitherto were considered no go areas for the law-enforcement agencies.