ISLAMABAD:The cigarette industry has experienced a surge in illegal trade in recent months, particularly following a significant excise increase in February 2023.
Fuelled by this excise hike, industry sources have revealed a concerning trend of widespread availability of counterfeit cigarettes in the market, affixed with fake stamps, according to a press release issued here by Pakistan Tobacco Company (PTC).
This raises serious doubts about the efficacy of the Track and Trace System, both in terms of implementation and enforcement.
According to industry sources, around Rs 850 million counterfeit cigarette sticks are currently being sold, equivalent to Rs 42.5 million packs featuring fake stamps, resulting in a substantial loss of approximately PKR 5.7 billion in duties and taxes to the national exchequer.
The issue is more prevalent in big metro cities such as Islamabad and Rawalpindi as well as other regions. It is surprising to note such blatant violations in cities where enforcement is considered easie
r to conduct by the relevant authorities in contrast to far-flung areas.
The implementation of a Track and Trace system can only be successful through extensive and sustained enforcement at the retail level.
Only two cigarette manufacturers have diligently implemented the Track and Trace System, in letter and spirit, yet the prevalence of illicit trade persists and continues to grow.
All cigarette manufacturers must be brought into the tax net to ensure the success of this system.