Govt vows crackdown on illicit cigarette trade

May 07, 2026 (MLN): The government has pledged a comprehensive crackdown on Pakistan's growing illicit cigarette trade, acknowledging that weak enforcement rather than lack of policy is driving an estimated annual revenue loss of Rs350 billion.

Officials stressed the need for coordinated federal and provincial action to close regulatory gaps, strengthen traceability mechanisms, and bring the undocumented tobacco sector into the formal economy, while also unlocking the industry's export potential, according to a press release issued.

Federal Minister for Commerce Jam Kamal Khan made the commitment during a detailed meeting with a delegation led by Marco Mariotti, President CIS & Central Asia, Philip Morris International.

The delegation briefed the Minister on the scale of the crisis, noting that between 45 to 47 billion cigarettes are being sold annually without payment of taxes, creating a deeply uneven playing field for compliant businesses.

The discussion covered structural weaknesses across the tobacco supply chain, including under-reporting of production, misuse of procurement contracts, and limited traceability  all of which enable informal players to access raw materials and expand illicit manufacturing operations.

The meeting also touched on broader economic concerns linked to the undocumented segment, including undisclosed income, money laundering risks, and market distortions.

The role of the Pakistan Tobacco Board was reviewed, with participants calling for its restructuring to give it a more proactive monitoring and enforcement mandate.

Stakeholders also flagged potential complications arising from Pakistan's IMF commitments, particularly the gradual removal of import restrictions, which could affect efforts to control the supply of key manufacturing inputs.

Minister Jam Kamal Khan directed that stakeholder proposals be consolidated into concrete, actionable recommendations focused on enforcement, traceability, and shrinking the informal economy, reiterating the government's commitment to a fair and transparent business environment.

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