Tobacco industry pushes for tax rationalization, formal sector support

June 11, 2026 (MLN): The government has assured the tobacco industry it will carefully examine proposals on taxation, enforcement against illicit trade, and measures to strengthen Pakistan's documented economy, acknowledging industry concerns over high taxation, elevated financing costs, increasing compliance requirements and provincial levies.

The assurance came amid growing alarm over illicit cigarette trade, with the industry noting that smuggled tobacco products  particularly through border regions had become one of the most lucrative contraband categories, causing substantial losses to the national exchequer.

Federal Minister for Commerce Jam Kamal Khan gave the assurance during a meeting with a delegation of Pakistan Tobacco Company (PTC), which presented budget-related proposals and called for stronger enforcement against non-duty-paid and smuggled cigarettes, APP reported.

 The delegation informed the minister that enforcement measures over the past year had already contributed to a reduction in illicit cigarettes' market share, improving government revenues.

PTC urged the government to restore a simplified Final Tax Regime (FTR) mechanism for imports, rationalize tax policies to discourage illicit trade, and broaden the tax base by bringing the undocumented sector into the formal economy.

The minister invited PTC to formally submit its proposals for consideration by relevant authorities, and emphasized stronger coordination among federal and provincial institutions to reduce business costs and streamline the regulatory environment.

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