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Illegal Trade & Its Impact On Economy

Stop Illicit Cigarette Trade
and save Rs. 44 Billion annually

Petition to Policy Makers and Government of Pakistan

I will not stay silent

I will not let the illicit cigarette mafia rob my country

I will work with others to campaign against this menace

I will speak out against illicit cigarette mafia

I will not stop until they are stopped

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In Pakistan, Rs. 44 Billion is looted every year by illicit cigarette trade [1]. This robbery is done by illicit cigarette manufacturers who under-declare their production to evade taxes.

In 2018, Oxford Economics published a report, wherein, a survey was conducted across 16 countries in Asia, Pakistan ranked number 1 for illegal Cigarette Consumption [2]. Off the 77.8 Billion cigarette sticks consumed in Pakistan, 41.9% of that market is captured by illegal cigarettes which account for 32.6 Billion non-tax paid cigarettes [2]. If we are able to collect this amount, it will help bring in new revenue streams which can be invested in Pakistan to improve public services, provide employment opportunities and have a direct impact on our national growth.

There is an urgent need to #StopIllegalTrade of all forms to ensure our country prospers.

Overview

Pakistan is plagued by illegal trade across major sectors, this is negatively affecting tax revenue, causing difficulties in growth and dissuading investment opportunities [3]. It is estimated that

Pakistan loses Rs. 300 Billion every year due to smuggling in just 11 goods

(this does not include counterfeit, tax evasion and under declaration by local manufacturers)[4]

 

The significance of this issue is such that Prime Minister Imran Khan made a mention of illegal trade and smuggling taking place across industries in his ‘First 100 days in Government’ speech and the harm it brings to Pakistan’s economy.

Our next big challenge should be the detection and elimination of illegal and illicit trade in our country that has been ravaging our economy every single day. When we talk about the unfair trade of goods in Pakistan, issues that come under light are: Illegal Wildlife trade, illegal trade of goods like mobile phones, televisions, vehicles, fabrics, auto parts, diesel, tea and trade of tobacco and many others.

A study by the customs department revealed alarming statistics on illegal trade in Pakistan. It is estimated that 59% of the overall demand of the products that includes petroleum, tea, mobile phones and auto parts industry, is met through illegal and unfair trade practices of smuggled goods [3]. This development is an explanation and core reason as to why Pakistan continues to suffer from low tax revenue and a difficult growth path.

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