According to a report by the DailyTimes on May 21, the World Health Organization (WHO) has refuted claims by international tobacco companies regarding illegal tobacco trade, stating that Pakistan actually accounts for 23% of such trade. WHO's research shows that unmarked locally-produced cigarettes account for 10.4% of the total amount of illegal tobacco trade in Pakistan.
The latest report from the World Health Organization reveals that counterfeit tax stamps on tobacco packaging account for 1.9% of total packaging, while smuggled tobacco makes up 10.7% of total consumption. Additionally, the WHO has debunked many rumors and strategies used by multinational tobacco companies to evade taxes.
Before the implementation of a tracking and tracing system in the country, multiple studies were conducted to estimate the volume of illegal trade in Pakistan. These studies found that the illegal trade market in Pakistan accounted for 9% to 17%, but they did not estimate the severity of the counterfeiting issue.
The report cites data from the Pakistan Bureau of Statistics (PBS) indicating that the amount of tax evasion from domestic cigarettes reached 53.8 billion rupees in 2015-2016. Of this amount, 38.9 billion rupees (72.7%) was evaded through underreporting production levels by the legal industry, while 14.6 billion rupees (27.3%) was evaded through other means.
A research report indicates that the most effective way to reduce tobacco consumption is by increasing taxes to raise the prices of tobacco products. In Pakistan, the cigarette industry claims that higher taxes will lead to illegal trade, arguing that smokers will not quit but rather switch to cheaper untaxed cigarettes.
The world's top medical institution emphasizes that taxing the tobacco industry is necessary to raise the prices of tobacco products in Pakistan.
Anti-tobacco activists are urging the government to increase tobacco taxes to 70% of retail prices in order to align with World Health Organization guidelines and prevent the alarming rate of tobacco consumption among young people.
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