LAHORE - In the absence of a comprehensive tobacco policy, the unregistered tobacco business is growing fast across the country causing loss to the registered companies which are paying tax of billions of rupees to the government.
According to the ‘Asia-11: Illicit Tobacco Indicator study’, conducted by Oxford Economics, the consumption of illegal cigarettes is 25.4% in Pakistan. The domestic illegal 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 non-duty paid cigarettes, which is highest amongst the 11 surveyed countries. ‘Cricket, an unregistered cigarette brand is a good example of fast growing domestic illicit tobacco trade. This brand is being sold openly in the major cities of Punjab at a retail price that is much lower than the minimum price established by the government.
Earlier, it was sold in Narowal, Dina and some adjoining areas of Lahore but now we can easily find this illegal brand being sold in the major urban centers like Lahore. However, no legal action has been taken against this and other such illicit brands resulting in the thriving illegal business that harms the legal industry and the national exchequer, which loses billions in terms of revenue.
Dr. Muhammad Idrees, Assist Professor and a renowned economist was of the view that the Oxford Economics Report clearly reflects the need that the government should focus more on domestic illicit tobacco as it stands at 86.3% and Non-Domestic Illicit is only 13.7%.
The report suggests that the government has been targeting the legal brands by heavy taxation to control the tobacco use but that approach was ultimately playing havoc with the country’s economy, as people were turning towards the illicit brands available on cheap prices.
According to the Oxford estimates, this rapidly growing business had resulted in tax Revenue losses of about more than Rs. 27 billion in 2012 only.