Tag: Illegal cigarettes

  • Major seizure: RTO Rawalpindi destroys 25 million smuggled cigarettes

    Major seizure: RTO Rawalpindi destroys 25 million smuggled cigarettes

    The Regional Tax Office (RTO) Rawalpindi carried out a significant operation on Thursday to destroy a large quantity of illicit, smuggled, counterfeit, and non-duty-paid cigarettes. The estimated value of the destroyed products was approximately Rs194 million.

    The event, held at Chakbeli Road in Rawalpindi, involved the destruction of 2,585 packrites, which equates to 25,580,000 cigarette sticks.

    Chief Commissioner of RTO Rawalpindi, Tehmina Aamer, presided over the ceremony as the Chief Guest.

    The event was attended by several key stakeholders, including members of the World Health Organization (WHO) and officers from the Federal Board of Revenue (FBR).

    During the ceremony, the participants were briefed on the entire process, from the initial confiscation of illicit tobacco and tobacco products to their eventual destruction, in accordance with the law.

    Following the briefing, the distinguished guests collectively set fire to the seized cigarettes, effectively destroying them.

    This operation underscores the RTO Rawalpindi’s commitment to combatting the illegal trade of tobacco products and ensuring compliance with national and international regulations.

    The destruction of these illicit cigarettes also serves as a reminder of the ongoing efforts to protect public health and maintain the integrity of the country’s tax and revenue system.

  • Illegal cigarettes capture 50% of market share: Official tobacco sector calls for govt help

    Illegal cigarettes capture 50% of market share: Official tobacco sector calls for govt help

    The tobacco sector that’s officially documented is urgently seeking government support to address the growing issue of smuggled and illicit cigarettes, which now make up over 50 per cent of the local market.

    During a recent briefing on “Current Tobacco Dynamics,” representatives from the Pakistan Tobacco Company (PTC) expressed concern that the market share of these illicit tobacco products could surpass 53 per cent in the next quarter of the fiscal year 2023–24.

    While a 200 per cent increase in excise duty (FED) on cigarettes was implemented, its real impact is expected to become evident in the current fiscal year. Sami Zaman, spokesperson for PTC, highlighted a 44 per cent drop in legitimate cigarette production in June, along with a 28.4 per cent overall sales decrease for the 2022–23 period.

    The implementation of the track-and-trace system has been limited to just two international manufacturers, leaving the rest of the undocumented tobacco sector largely unmonitored. Zaman stressed the need for consistent application across all local manufacturers to prevent tax evasion units from buying untaxed tobacco directly from farmers.

    Zaman also expressed concern about the government’s inability to effectively control the sale of untaxed, health-warning-free smuggled cigarettes. Currently, only multinational companies with track-and-trace systems are under scrutiny.

    According to Brecorder, smuggled cigarettes, due to their tax evasion, remain cheaper, lack mandatory graphic health warnings, and often come in appealing flavours, sometimes even in loose packs. Despite a significant 200 per cent increase in excise duty, the market continues to be flooded with untaxed, affordable cigarettes.

    Due to a shortage of raw tobacco, prices have risen. The growing illicit market is expected to have a significant impact on both legitimate industry volumes and government revenues in the upcoming quarter.

    Despite contributing Rs175 billion during the 2022–23 period (compared to a Rs180 billion target), the tobacco sector’s excise duty collections increased while volumes decreased.