PESHAWAR: In a major crackdown on illicit trade, the Collectorate of Customs Enforcement, Peshawar, under the special directions of the Chief Collector of Customs (Enforcement), has successfully foiled multiple attempts to smuggle foreign-origin cigarettes into Pakistan.
During the first quarter of fiscal year 2025–26, Customs teams seized 18.27 million sticks of smuggled cigarettes valued at Rs154.9 million. This marks a sharp rise from 14.11 million sticks worth Rs97.04 million seized during the same period last year, a 60% increase in value.
Officials said the operation underscores Pakistan Customs’ strong commitment to combating smuggling, protecting legitimate businesses, and safeguarding the national exchequer.
Report Finds Surge in Illicit Cigarette Production
Last month, a study by global consultancy Alvarez & Marsal (A&M) had urged Pakistan to take stronger corrective measures against the trade of smuggled cigarettes, which continues to inflict significant financial losses on the government.
The A&M report, which employed an innovative method to assess Pakistan’s cigarette production capacity by tracking acetate tow, a key raw material, had revealed that the country imported enough of the material in 2023 to manufacture between 60 and 80 billion cigarettes. Of these, only 39 billion were legally produced, including 2 billion exported sticks, while an alarming 41 billion were linked to non-duty-paid (DNP) producers.
Despite the government’s decision to impose an adjustable Federal Excise Duty (FED) of Rs44,000 per kilogram on acetate tow imports in FY 2024–25, the measure did not yield the desired results. Official trade data shows imports plummeted from 2.36 kilotons in 2023 to just 0.145 kilotons the following year, yet the availability of local DNP brands remained largely unchanged.
The report had further revealed new smuggling routes through the Sust border with China and the Torkham border with Afghanistan, identified through recent Federal Board of Revenue (FBR) seizures. It cautioned that the higher FED has made acetate tow smuggling more profitable, worsening the challenge.
