Khyber Pakhtunkhwa Becomes the Hub of Illegal Cigarette Manufacturers

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Tobacco

Khyber Pakhtunkhwa is the hub of illegal cigarette manufacturers. In Pakistan, around 80 billion cigarettes are sold annually, of which every third cigarette tax is evaded which is causing a loss of over 77 billion rupees to the national exchequer annually.

The illegal cigarette brands are mostly manufactured in KPK. The politics of KPK has also been closely related to the cigarette industry and elements involved in the illegal sale of cigarettes have access not only to important positions in political parties but also to the Senate and the National Assembly.

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According to experts, it will be impossible to achieve the goals of obtaining economic benefits and documenting the sector without ending the nexus of illegal tobacco and cigarette trade and politics. Due to the nexus of the illegal cigarette business and politics, the cigarette industry could not be brought under the tax net. Former Prime Minister Imran Khan himself admitted that two companies dealing in cigarettes in Pakistan pay 98% tax while More than 50 other companies are paying 2% tax together.

Despite being politically strong in KPK and maintaining the continuity of the provincial government, the federal government of Tehreek-e-Insaf could not bring the cigarette industry under the tax net.

The Tehreek-e-Insaf government imposed a tax of Rs 300 per kg on tobacco, but the elements involved in the illegal cigarette business used their political influence and traditional tactics to prevent the tax from being implemented.

The people involved in the illegal cigarette trade in KPK have also strengthened their roots in the Tehreek-e-Insaf, which is the reason why the provincial and federal governments have failed to curb the illegal cigarette trade, which has put the entire burden on the legal industry.

Faisal Saleem, the Senate candidate from PTI leader KPK and former vice-chairman of Khyber Pakhtunkhwa Board of Investment and Trade, has been investigated by FBR and FIA for causing huge loss to the national exchequer through illegal cigarette business. FBR also sealed a cigarette factory located in Buner where fake brands of well-known brands were being manufactured, but Faisal Salim showed his detachment from this factory.

Earlier, the Tehreek-e-Insaf government’s attempt to impose a tax of Rs 300 per kg on tobacco in 2018 failed due to the influence and access of elements involved in the illegal trade to the corridors of power.

At that time, the elements involved in the illegal trade of cigarettes launched a vigorous campaign against this tax in the provincial and central governments, due to which a special committee was established under the chairmanship of Speaker of the National Assembly, Asad Qaiser.

Surprisingly, this committee included all those who were associated with the tobacco business and whose interests were affected by the imposition of tobacco tax.

The current federal government has imposed an advance tax of Rs 390 per kg on tobacco threshing, taking an important step to bring the illegal cigarette business under the tax net and prevent tax evasion of billions of rupees annually.

This initiative of the federal government has been welcomed by the legal cigarette industry, but industry experts say that transparent investigations against the politically influential figures involved in the illegal cigarette trade are also indispensable.

Experts said that the government’s determination to bring the tobacco business under the tax net can be strengthened by the investigation against those figures of the previous government who continued to weaken the country’s economy through illegal cigarette trade and Pakistan is facing an economic crisis.

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