ISLAMABAD, Sep 15 (APP):Fair Trade in Tobacco (FTT) on Tuesday called for an urgent review of the reported Rs40 billion estimate of tax evasion in the cigarette sector, saying the figure appeared inconsistent with the size of the illegal market and earlier revenue-loss estimates. Speaking at a media event here, FTT Chairman Muhammad Amin presented an analytical report examining the reported Rs. 40 billion figure against cigarette-market size, documented tax …
FTT calls for review of Rs. 40 bln tobacco tax-evasion estimate
ISLAMABAD, Sep 15 (APP):Fair Trade in Tobacco (FTT) on Tuesday called for an urgent review of the reported Rs40 billion estimate of tax evasion in the cigarette sector, saying the figure appeared inconsistent with the size of the illegal market and earlier revenue-loss estimates.
Speaking at a media event here, FTT Chairman Muhammad Amin presented an analytical report examining the reported Rs. 40 billion figure against cigarette-market size, documented tax collections, illegal-market share, and publicly available estimates regarding the illegal and smuggled cigarette market.
“The central question is very simple,” Amin said, noting that the documented cigarette sector, representing roughly half of the market, contributed more than Rs300 billion in taxes.
The report noted that the tobacco sector generated around Rs329 billion in Federal Excise Duty and General Sales Tax during fiscal year 2025-26, while the two largest documented cigarette manufacturers alone contributed about Rs314 billion to the national exchequer.
FTT said estimates of the illegal and smuggled cigarette market ranged from around 34 per cent to more than 50 per cent of national cigarette consumption.
Amin said that even if the illegal market was conservatively estimated at 45 per cent, a proportional comparison with the taxes collected from the documented sector would indicate a significantly higher potential revenue loss than Rs40 billion.
He said previous FBR statements had estimated annual revenue losses from illegal cigarette manufacturing and trade at around Rs250 billion to Rs300 billion, while other government-linked and independent estimates had also placed the loss substantially higher.
These estimates differ in methodology, but they all point in the same direction. The revenue loss is measured in hundreds of billions of rupees, not merely tens of billions,” he said.
Amin urged the federal government, FBR and the relevant Senate committee to require full disclosure of the methodology, data sources, market assumptions, company-level calculations, and definitions used to arrive at the Rs. 40 billion figure.
He also urged the authorities to investigate why such a substantially lower figure was presented when previous official estimates have been several times higher.
Amin said the demand was not to accept any particular industry estimate but to ensure that the figures were based on transparent methodology and consistent definitions.
“Accurate measurement is the first requirement for credible enforcement and sound tax policy,” he added
