LAHORE - About 23.7 per cent of the cigarettes in Pakistan are illegal, says a report published by Nielson Pakistan.

Speaking at a seminar on “The challenge of Illicit Trade in Cigarettes: Impact and Solutions for Pakistan”, representative of Nielson Pakistan Rabia Asif presented the findings of the report.

As per the report, illegal cigarette industry is growing at a very rapid pace and is causing an annual loss of Rs24.6 billion to the national exchequer in the form of duties and taxes. While the tax complaint pack prices have increased over the years, the duty evaded pack prices remain low and in most cases are sold at prices which are lower than the minimum tax payable.

The report states, in 2014, the average price of a legitimate duty paid cigarette pack of a lower category was Rs57 whereas the average price of a non-duty paid pack in the same category was only Rs27, despite the fact that the minimum tax payable on cigarette pack is around Rs33. Due to this difference, consumer having low income switches to duty evaded packs.

One of the main causes of the growth of illicit cigarettes which has been over 43 per cent in the last six years is cited to be weak enforcement. While the report also discusses the government efforts in the past, it also highlights and recommends solutions.