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ISLAMABAD: Pakistan expects to receive Rs 185 billion in taxes from the cigarette industry this year.
Capital Calling, a network of academic researchers and professionals, said in its report that some cigarette manufacturing companies are trying to mislead the government to reduce taxes on the sector.
The report said that the government should stick to its decision to increase taxes on tobacco products. The network says it is unrealistic to establish a causal link between higher taxes and illegal cigarette sales. A civil society group says less than 15 percent of the market goes to illicit cigarettes. One in six cigarette packs consumed in Pakistan may be illegal.
While the figures are much lower than those disseminated by the tobacco industry, the network cited a study by the University of Cape Town and Pakistan’s Ministry of Health that concluded that regarding tobacco use in Pakistan, Only 13 percent of cigarettes sold are illegal.
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According to the Pakistan Tobacco Board, the tobacco industry contributes 200 billion rupees to the country’s economy annually. The illegal cigarette trade, worth about Rs 26 billion annually, deprives the government of much-needed revenue through taxes.
The illegal cigarettes in the market are mainly of multinational brands, indicating that these multinational tobacco companies are profiting from this illegal activity in one way or another.
