ISLAMABAD  -  The Action to Counter Illicit Trade (ACT) Alliance on Saturday appreciated the Federal Board of Revenue (FBR) for highlighting Pakistan’s ongoing battle with tax evasion, particularly in the tobacco sector. 

In a discussion with civil society and media representatives here, the ACT Alliance lauded Chairman FBR dedication to addressing this pervasive issue, recognizing that his leadership is critical to securing Pakistan’s economic future, said a news release. During a recent Senate Standing Committee on Finance meeting, FBR reported that an alarming 70 percent of cigarettes sold in the country evade taxation, amounting to a massive revenue shortfall for the national exchequer.

With only 30 percent of cigarettes on the market being tax-paid, Chairman FBR Rashid Mahmood Langrial, announced a significant crackdown on smuggling and illegal cigarette sales to begin in January, with the recruitment of additional enforcement personnel.

According to FBR’s projections, tackling these illicit sales could generate Rs. 200-250 billion in additional revenue annually, from Rs. 300 billion to over Rs. 500 billion, or nearly $2 billion. This projected increase in revenue is crucial for funding essential public services and driving economic growth. The FBR’s ambitious transformation plan includes implementing a 100 percent Track and Trace System (TTS) in the sugar industry by the start of the upcoming crushing season. Additionally, FBR has made significant strides in the cement sector, meeting with industry leaders to ensure that TTS is operational across all production lines in the coming weeks. Expanding TTS in these industries will enable precise tracking of production and sales, helping prevent further tax evasion and securing essential revenue for Pakistan. To support this initiative, the government plans to grant provincial authorities, including local police, the power to enforce measures against illegal cigarette sales.

The Alliance called for substantial regulatory amendments to formalize the expanded enforcement network and create a collaborative framework to uphold tax laws across Pakistan. 

The ACT Alliance urged the government to accelerate this process and broaden enforcement to other sectors plagued by tax evasion, such as petroleum, real estate, and retail.

ACT Alliance said collaboration across government agencies, provincial authorities, and law enforcement is essential to achieving Pakistan’s economic goals.

The annual loss of revenue from the illegal cigarette trade alone is a burden Pakistan can no longer afford. 

ACT Alliance National Convenor Mubahsir Akram said “We call on all stakeholders to support FBR’s efforts, reinforcing measures that strengthen tax compliance and encourage economic integrity,”.

He added these critical steps will position Pakistan for a more prosperous future, ensuring fair contributions to the national economy from all sectors.

ACT Alliance reiterated its support for FBR’s efforts. It encouraged all relevant authorities to take a unified approach against illicit trade, contributing to Pakistan’s healthier and more resilient economic landscape.

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