ISLAMABAD, Dec 18 (APP):Pakistan Tobacco Company (PTC) on Thursday welcomed recent government efforts to curb the illegal tobacco sector, warning that sustained enforcement was essential to recover lost revenue and stabilize the legitimate market. During a media briefing here by the PTC officials, they said coordinated actions by law enforcement agencies this year led to the confiscation and destruction of cigarettes and raw materials equivalent to nearly 17 billion sticks. …
Enforcement against illicit sector must be sustained to reclaim lost revenue: PTC
ISLAMABAD, Dec 18 (APP):Pakistan Tobacco Company (PTC) on Thursday welcomed recent government efforts to curb the illegal tobacco sector, warning that sustained enforcement was essential to recover lost revenue and stabilize the legitimate market.
During a media briefing here by the PTC officials, they said coordinated actions by law enforcement agencies this year led to the confiscation and destruction of cigarettes and raw materials equivalent to nearly 17 billion sticks.
Despite these gains, they cautioned that the illicit tobacco market continued undermining government revenue.
They called for a holistic regulatory approach covering the entire supply chain, including raw material controls, manufacturing oversight, track-and-trace systems, logistics and distribution, stronger border management, and tougher prosecution of illicit traders and retail enforcement.
“Without comprehensive regulation across the value chain, enforcement gains will not be sustainable,” the officials said.
Hamza Khan, regulatory engagement manager at Pakistan Tobacco Company, said that while excise revenue collections have increased in nominal terms, real revenues adjusted for inflation were lower than they were a decade ago.
“This decline is largely driven by downtrading from higher-priced legal brands to cheaper illegal products,” he said, adding that the trend accelerated following a sharp excise increase in the 2022–23 fiscal year.
The officials suggested reviewing the recent documentation measures, particularly the imposition of federal excise duty on acetate tow, a key raw material used in cigarette manufacturing, as the tax has made acetate tow one of the most lucrative products to smuggle.
According to the officials, more than 500 tons of acetate tow were seized over the past year, underscoring what they described as the unintended consequences of high taxation.
Hamza Khan stressed the need for a stronger compliance with the government’s track-and-trace system, noting that numerous cigarette brands remained widely available without the required stamps.
Industry stakeholders urged policymakers to maintain strong enforcement against illicit trade to protect government revenues, while also pursuing a balanced tax policy that supports fair competition and strengthens the national economy.
