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ISLAMABAD, Nov 18 (APP): Chairman, Fair Trade in Tobacco (FTT) here on Monday highlighted the importance of policy reform to support Pakistan’s agricultural economy and the livelihoods of millions dependent on the tobacco industry.
He urged the government to rationalize excise duties on tobacco products in Pakistan to combat the rising share of illicit trade and protect the legitimate sector from further economic damage, said a news release.
“The legitimate tobacco sector in Pakistan is already heavily taxed,” said adding that “Tier-I brands are paying 84% in excise, while Tier-II brands face a 60% excise duty.
However, the illicit sector pays nothing and continues to grow unchecked, depriving the national exchequer of Rs. 300 to 330 billion annually—equivalent to $1.2 billion. This is a staggering loss for our economy.”
He emphasized that the share of illicit trade in Pakistan’s tobacco market has skyrocketed from 37% in 2021 to nearly 63% in 2024.
These illicit operators sell their products below the legal minimum price of Rs. 162.25, bypassing tax obligations and undercutting legitimate businesses.
He pointed to a persistent lobby targeting the legitimate tobacco sector by advocating for increased excise duties.
“This lobby fails to recognize that the legitimate sector is already on the brink of suffering tremendous losses. Additional tax burdens will harm compliant businesses and further empower the illicit trade,” he added.
The chairman proposed that rationalizing excise duties on legal tobacco products is the only viable way to level the playing field and curb illicit trade.
“An excise reduction will enable the legitimate industry to compete effectively with the illicit sector. This will increase tax compliance and help the government recover significant lost revenue,” he said.
Expressing concern for the livelihoods of those dependent on tobacco farming, the chairman reminded the government of the crop’s importance to Pakistan’s agricultural economy.
“Tens of thousands of farmers and millions in their families rely on this crop for survival. The government must not cave into the fallacious propaganda of certain anti-tobacco INGOs that operate without proper authorization. Rationalizing excise is a matter of supporting tax collection and protecting our farmers and their families,” he asserted.
FTT’s Chairman called on policymakers to act decisively in the national interest.
“It is time to prioritize the legitimate sector and recognize its contribution to Pakistan’s economy. Rationalizing excise is not a concession but a necessary step toward fiscal stability and fairness,” he added.