
Rs415 billion in losses raise alarms over tobacco enforcement
They pay nothing, follow no rules, and yet continue to grow. The law is chasing what is visible, not what is dangerous.
The formal industry, despite contributing nearly Rs270 billion in taxes each year, now controls only 46 percent of the market. The remaining share belongs to illegal operators selling cigarettes at a fraction of legal prices.
This thriving black market is causing an annual loss of over Rs415 billion revenue that could have supported healthcare, education, or debt relief.
Instead, it is being lost to unchecked trade networks and lack of enforcement. Much of the blame lies with those who claimed to champion public health.
Campaign for Tobacco-Free Kids and Vital Strategies ran campaigns targeting the regulated industry while staying silent on the illicit trade that now dominates the market.
Last year, the government shut down both INGOs for operating without registration, funding local entities without approvals, and engaging in policy circles unlawfully. Their work, once seen as advocacy, is now under scrutiny for policy interference and regulatory evasion.
'This is not about tobacco anymore,' said Fawad Khan, spokesperson for Mustehkam Pakistan. 'It is about survival. When lawbreakers take over the market and face no consequences, the whole system starts to collapse. We are rewarding the illegal and punishing the legal—and everyone in the country is paying for it.'
At the same time, the IMF continues to push Pakistan to broaden its tax base and reduce leakages. But fiscal targets cannot be met if entire sectors remain outside the net. Experts argue that unless enforcement expands to include illegal trade, even the most disciplined revenue policies will fall short. The issue is no longer about raising taxes—it is about applying them fairly.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


Express Tribune
2 days ago
- Express Tribune
Rs415 billion approved for rehabilitation of 'killer road'
The government on Friday conditionally cleared the construction of three different sections of the 'killer road', the Balochistan Expressway or N-25, at an estimated cost of Rs415 billion, which is being funded through Rs8 per liter levy on petrol and high speed diesel. The Central Development Working Party (CDWP) cleared, in principle, construction of the three sections having a total length of 692 kilometers with an estimated cost of Rs415 billion for three different sections, according to the Ministry of Planning officials. Once completed in at least three years, there will be a dual carriageway from Quetta to Karachi, which will also open new avenues of economic development and connectivity. The Deputy Chairman of the Planning Commission and Planning Minister Ahsan Iqbal chaired the CDWP meeting. The project, to be executed in three different sections, will be presented before the Executive Committee of the National Economic Council (ECNEC) for its final approval after the National Highway Authority addresses queries raised in the CDWP meeting on Friday. The CDWP has the mandate to approve up to Rs7.5 billion projects and refer the higher cost schemes to ECNEC, which is chaired by the Deputy Prime Minister Ishaq Dar. The CDWP recommended dualisation of Karachi-Quetta-Chaman road having 278 kilometer length for the approval of ECNEC. This route will be constructed with a cost of Rs183.4 billion in three years and Rs33 billion have been set aside in the budget for the current fiscal year. However, given the low allocations in the first year, it will be challenging to complete this major route in three years unless the allocation is increased to Rs75 billion annually from the next fiscal year. The CDWP also in principle cleared the Rs99 billion worth dualization of Khuzdar-Kuchlak section of N-25 having 332 kilometers length. For the current fiscal year, the government has allocated Rs34 billion for its construction. The cost of the Khuzdar-Kuchlak section is less compared to the other two roads due to the award of contracts in the year 2021. About 52% work on this Khuzdar-Kuchlak road is already completed and the remaining work is expected to be finished in two years. The CDWP also sanctioned the dualization of Karoro Wadh section & Khuzdar Chaman section at a cost of Rs133 billion to build 104 kilometer road. For this fiscal year, Rs33 billion have been earmarked for this section. This project will need Rs50 billion per annum allocation for the next two fiscal years to complete the scheme on time. Prime Minister Shehbaz Sharif in April this year imposed an additional Rs8 per liter levy on every liter of petrol and diesel consumed by rich and poor alike to fund these deadly roads. There had been criticism against the Prime Minister's decision due to the fact that people already are heavily taxed and the government should wisely use these resources instead of putting more burdens. The government currently charges Rs75 per liter petroleum levy, Rs2.5 per liter climate levy and 10% custom duty on every liter of petrol sold in Pakistan, making it one of the heaviest taxed products. The petrol is now sold at Rs272 per liter after adding all taxes and profit margins of dealers. But PM Shehbaz reacted to these criticisms and stated that those opposing road projects in Balochistan, were narrow-minded. "We will complete the Karachi, Kalat, Khuzdar, and Quetta highway projects to the highest standard," he had vowed. The premier had said that the initiative to build roads reflected the aspirations of the people of Balochistan and was aimed at enhancing connectivity and ensuring safer travel in the province. The CDWP raised questions about the alignment of roads, revisions in the cost and the land acquisition. Once the sponsoring ministries address these questions, the projects will be tabled before the ECNEC for the final approval. For the current fiscal year, the government has allocated Rs1 trillion for the federal Public Sector Development Programme. Out of this, Rs210 billion has been set aside for various projects of Balochistan.


Express Tribune
17-07-2025
- Express Tribune
Wanted 'robbers' shot dead
Two members of an inter-district robbery gang were shot dead in an encounter with the Counter Crime Department (CCD) on Jahanian Road in Khanewal. The suspects, Naveed and Nadeem, were wanted in multiple armed robbery and home invasion cases across Punjab, including in Khanewal, Sahiwal, Vehari, Okara and Lahore. Police said the suspects had been evading arrest for several weeks. They were allegedly involved in a string of high-profile robberies, including a recent incident in W Block, People's Colony, Khanewal, where they held women hostage at gunpoint and stole gold jewellery worth over Rs10 million and Rs270,000 in cash from a banker's residence. They were also accused of looting several shops under the City Police Station's jurisdiction before fleeing while firing indiscriminately. In response to the surge in criminal activity, Khanewal District Police Officer Muhammad Ismail Kharrak and CCD in-charge Mehar Ishaq Sial had deployed special teams and established checkpoints at city entry and exit points. On the day of the encounter, the suspects were seen entering the city on a motorcycle. After breaking into a vacant house in Chowk Maki, they were spotted and fled the scene. They then attempted to rob a shop at Awan Chowk but failed again and continued to flee. The first armed exchange took place near Football Chowk on Stadium Road, where the suspects opened fire on police. The police retaliated, managing to puncture their motorcycle's rear tyre. The suspects continued to flee to Lakri Mandi, where they abandoned the motorcycle, hijacked a rickshaw and headed toward Lahore Mor. At a CCD checkpoint near the MEPCO office, police signalled the rickshaw to stop.


Express Tribune
08-07-2025
- Express Tribune
PAC unearths Rs1.2b bank loan scandal
An audit report presented to the Public Accounts Committee (PAC) has revealed that Zarai Taraqiati Bank Limited (ZTBL) employees caused a loss of Rs1.2 billion to the national treasury through a fraud involving forged documents. Audit officials on Tuesday told a meeting of the PACheld under the chairmanship of Junaid Akbar on Tuesdaythat in several cases, loans sanctioned for farmers never reached them as ZTBL employees misappropriated these loans. Appearing before the committee, ZTBL president stated that the bank dismissed 400 employees found involved in altering loan documents. "We have placed personal contact numbers and awareness boards in every branch. We have recovered Rs270 million so far, and recovery efforts are ongoing," he said. The committee asked the president to address the issue in coordination with the audit department. It was also revealed that the ZTBL had failed to recover Rs9 billion in loans with 1,601 borrowers not returning even a single rupee. Audit officials said only 16% of recoverable amounts were collected from borrowers in Quetta, Karachi, and Lahore. They also noted a growing number of loan defaulters across the country. MNA Khawaja Sheraz asked why is the ZTBL constantly sinking when the banking sector is profitable. The ZTBL is a state-owned agricultural development bank that provides agricultural credit and banking services to farmers across the country. It remains the largest public sector agriculture development financial institution in the country. The PAC also took suo motu notice on Jamshed Dasti's request regarding a loss of 1.1 million litres of petrol at the Pakistan State Oil (PSO) due to employee negligence. The PSO managing director (MD) told the committee that the estimated value of the lost petrol is Rs180 million. "We recovered Rs40 million from the responsible employees after dismissing them," he said.