Recent visits to the Federal Board of Revenue (FBR) have highlighted the emergency of new smuggling routes for acetate -to -border with China and the Turkham border with Afghanistan, which is the main raw material used to make cigarettes. The implementation of a high federal excise duty (Fed) has made Acet Two extremely profitable in smuggling, which has raised serious concerns for Pakistan’s economy.
In the financial year 2024/25, the government raised. 44,000/kg on acetate to immortality. Although the purpose of this policy was to improve documents and control in the cigarette sector, smuggling and misunderstanding by importers wishing to avoid taxes have increased rapidly.
Trade data clearly illustrates the issue: Imports of recorded acetate two fell from 2.36 kilograms in 2023 to only 0.145 kiloton in the financial year 2024/25. Despite this reduction, the capacity of local duty-pad (DNP) cigarette brands has not diminished, which has indicated the growing dependence on smuggled acetate two for production.
On Monday, the results of an independent study on illegal cigarettes conducted by Alvarez and Marsal (A&M) were shared with the media. A&M, a firm on global professional services specializing in forensic analysis and business investigations, submitted the report by Nick Hoodsman, the head of the Anti -Flexan Trade Policy at BAT. In this research, a unique approach was adopted to measure Pakistan’s cigarette production capacity by keeping aware of Acetate Two.
According to the report, in 2023, acetate magic in Pakistan was enough to produce 60 to 80 billion cigarettes. Of this volume, 39 billion cigarette sticks were developed by legitimate manufacturers, including 2 billion which were recovered and not subject to tax. However, about 41 billion sticks were manufactured by non -duty pad manufacturers. FBR’s Federal Excise Duty (Fed) and GST data confirm only 37 billion cigarette sticks, which expose a significant difference in potential public income.
Commenting on the results, Hoodsman said:
According to the report, Acetate Two provides a clear window in Pakistan’s potential for cigarette capacity capacity. The data shows the disturbing similarities between the announced volume and production capacity.
Hoodsman emphasized that without any border implementation and strict measures against wrongdoing, this threat to Pakistan is a threat to its illegal trade difference. This will damage government taxes, damage legitimate businesses, and weaken the national economy.