Illicit Cigarette Trade Soars in Pakistan After Tax Rise
The illicit cigarette industry's share in Pakistan has escalated to 39%, contrary to non-governmental organizations' claims of a 9-18% share, following a significant increase in the Federal Excise Duty (FED) from February 14, 2023. Multinational corporations' analysis revealed the introduction of 70 new smuggled cigarette brands post-price hikes, with a 30% rise in sales recorded in March alone.
These illicit products, boasting over 100 brands, lack the required health warnings as mandated by Pakistan's Ministry of Health and violate national laws. Despite this, they are sold freely, disregarding all governmental regulations.
Industry insiders dismiss the low illicit trade figures proposed by NGOs as irrelevant and unsupported by authentic market surveys. Reliable data is crucial for large multinational and national companies, who rely on top-tier retail audit firms like Access Retail for accurate market statistics. This company, providing services in various sectors, including tobacco, assists businesses in conducting detailed market analysis and planning.
Industry experts challenge the credibility of NGO-provided data, pointing to the questionable research methods and limited sample size of their surveys. They argue that these organizations overlook government actions against illicit cigarette trade and continually propagate an understated market share for illegal cigarettes. Recent trends indicate an alarming shift of 3 billion sticks from the formal sector to the illicit sector, severely impacting government revenue.
Thumbnail source: EU reporter
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