The illegal business has swelled to 11 % while sale of smuggled cigarettes has increased by more than 66% from Rs. 1 billion to 1.7 billion this year, FBR sources said.
The compliant cigarette industry delivers nearly 37% of total FED revenue and almost 3.5% of total FBR revenue. In the first three quarters of this year, the legitimate tobacco industry has contributed about Rupees forty eight (48) billion, in various taxes to the national exchequer. In the market, the sources said there are many important cigarette brands available that are selling at the minimum price level set by the government. The consumers switch to cheap non tax-paid products, causing losses of billions of rupees to the government revenue, the sources further said.
During the next national budget, the government should take corrective measures to discourage tax evasion in the industry.