Increase in Cigarettes smuggling

Islamabad: As cigarettes are highly taxed in Pakistan because of their harmful effects on public health, the government is losing billions in revenues that it could otherwise collect on legal import and sale of tobacco products.

According to insiders, 200 truckloads of smuggled goods including cigarettes enter the country every day from across the Afghan border. They blame government agencies and customs officials for lack of a strict check and allege the activity goes on with the connivance of some of them.

Industry sources confide that almost Rs 50, 000 are given to Afghan and Pakistani officials as bribe for clearing a single consignment.

Estimates suggest that Rs18 billion worth of cigarettes is smuggled into the country every year, besides tea worth Rs16 billion, petroleum products valuing Rs22 billion including smuggled LPG, auto parts and vehicles valuing Rs25 billion and other products of over Rs200 billion including cosmetics, clothing, footwear, medicines, spices, juices, electronics, etc.

The government is facing the huge loss of revenue apparently in the absence of concrete steps to stem the illegal trade.

 “As a result, sale of duty-paid cigarettes has increased in the country,” he said, pointing out that monitoring teams had been active to stop smuggling from Afghanistan under the transit trade.

A customs official, however, was of the view that it was extremely difficult to stop this illegal traffic on the long porous border. Government’s control in tribal areas close to the border had been weak under normal circumstances and it was now even weaker because of the poor security situation there, he said. “However, it does not mean that there is no way to check the illegal inflow of cigarettes.”

He suggested that the government needed to focus on two areas – enhancing the effectiveness of the system that was in place to confiscate smuggled cigarettes at entry points and seeking higher level of monitoring by the excise department.

“It should begin by holding them accountable for the glut of smuggled cigarettes in local markets,” a senior government official said.