ISLAMABAD: The cigarette industry has experienced a surge in illegal trade in recent months in Pakistan, especially following a significant excise increase in February 2023.
Fueled by the excise hike, a concerning trend of the widespread availability of counterfeit cigarettes in the market, affixed with fake stamps, is witnessed. This raises serious doubts about the efficacy of the Track & Trace System, both in terms of enforcement and implementation.
Nearly 850 million counterfeit cigarette sticks are currently being sold, equivalent to 42.5 million packs featuring fake stamps, leading to the substantial loss of approximately Rs5.7 billion in duties and taxes to the national exchequer.
The issue is more prevalent in big metro cities such as Islamabad and Rawalpindi as well as other parts of the country.
It is surprising to note such blatant violations in cities where enforcement is considered easier to conduct by the authorities in contrast to far-flung areas.
The implementation of a Track and Trace system can only be successful through extensive and sustained enforcement at the retail level.
Cigarette Manufacturers Ignore Track & Trace System
Only two cigarette manufacturers have diligently implemented the Track & Trace System, in letter and spirit, yet the prevalence of illegal trade persists and continues to grow. All cigarette manufacturers must be brought into the tax net to ensure the success of this system.