A serious revelation of large-scale tax evasion has surfaced within Pakistan’s cigarette industry, potentially causing billions of rupees in losses to the national treasury. According to a recent survey, a substantial number of cigarette brands sold nationwide are missing tax stamps, indicating widespread tax avoidance.
The survey results are alarming: approximately 81 percent of the cigarette brands sold in the country were found to be missing tax stamps, confirming that the required excise duties have not been paid on these products.
Key Findings of the Survey
- Evasion Rate: The survey confirmed that the absence of tax stamps on cigarette brands is leading to massive tax evasion.
- Compliant Products: Only 12 percent of cigarette products were found to have official tax stamps, indicating legal compliance.
- Parallel System: Approximately 7 percent of brands were simultaneously available in the market in both taxed and non-taxed forms, suggesting a parallel system of legal and illegal distribution.
The survey concludes that a parallel illegal distribution system is operating alongside legitimate cigarette companies, bringing products to market without paying taxes, which is severely impacting government revenues.
