Editor’s Note: One Pakistani Rupee (Rs.) equals about a US penny.
From: Pakistan Observer
Islamabad
According to report, there has been a shift in volumes and market share from the legitimate industry to the illicit sector. Illicit trade in cigarettes is 41% of the total market in Pakistan. Illicit trade comprises of locally produced tax evading cigarette brands and smuggled cigarette brands. Local tax evading accounts for almost 85% of the total illicit market and the remainder is smuggled.
More than 45 manufacturers are selling more than 145 brands in the market, evading the fiscal and regulatory laws of the country. The price differential between tax paying and tax evading brands grew to Rs. 47. A legitimate packet sells for Rs. 72 whereas an illicit pack sells for R. 25. It is alarming to know that the minimum tax applicable per pack is Rs. 43 and cigarettes are selling as low as Rs. 15. Excessive excise led price increases have fuelled the growth of such tax evading cigarette brands.
