Authorities fail to stop flow of smuggled cigarettes

Despite tall claims, the authorities concerned have failed to stop the flow of smuggling and illicit trade of cigarettes, which is not only affecting the smokers’ health but also damaging the country’s economy. In the absence of strict law more than 25 percent cigarettes that are sold in the country are illicit. 

While No Tobacco Day is observed every year with high claims and statistics on health damages of Tobacco, no strict action has so far been taken to halt the flow of smuggled cigarettes that not only come without pictorial health warning, mandatory in Pakistan, but also are sold on a very low price. Illicit trade of offsets the government Revenue of over PKR 10 billion annually a figure that is admitted by Federal Board of Revenue. 

Shahid Raza, an economist says that not only strict measures are required to improve revenue collection for the government but also effective measures to regulate the local tobacco retail market in order to discourage the entry of smuggled and counterfeit cigarettes in the domestic market will help lower the health cost for the nation. 

“Many of the anti-tobacco campaigners believe that by targeting legitimate tobacco industry, they could achieve their higher objectives and get rid of Tobacco products but that is not the case, when it comes to factual position and ground realities. The reality is that their efforts only damage the regulated industry that stands on legal foundation whereas the illegal business of tobacco continues to flourish and progress,” an expert of tobacco sector remarked. 

It is important to mention here that in Pakistan, the legitimate tobacco industry provides employment and livelihood to more than one million people including farmers, distributors and retailers, who are directly affected by any damage to the legitimate industry players. 

The sources in the market also hold the belief that the illicit trade of cigarettes and those involved in tax evasion go scot-free and rather they rule the market due to the absence of a legal industry. These sources said that no strict regulatory restrictions could be applied to the illegal cigarettes and, moreover, they hit the market without having the mandated health warnings. 

While talking about the open sale of illicit brands of cigarette, a shopkeeper in Raja Bazaar, Rawalpindi, said the prices of smuggled cigarettes are much lower as duties are evaded, bringing these low quality products within the reach of millions of new consumers, mostly youth. Whereas, the huge price difference between legitimate and illicit cigarettes has forced consumers to purchase cheaper duty-evaded brands, resulting in gradual increase in sales of smuggled cigarettes over the last couple of years. 

Copyright Business Recorder, 2013

Muhammad Ramzan Rafique
Muhammad Ramzan Rafique

I am from a small town Chichawatni, Sahiwal, Punjab , Pakistan, studied from University of Agriculture Faisalabad, on my mission to explore world I am in Denmark these days..

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