Defense Minister Khawaja Muhammad Asif said at the launch of a report last week that illegal cigarette dealers are so powerful in Pakistan that their representatives have now reached the assemblies, who would use public office to protect their business interests. are

Cigarette politics in Pakistan what are the facts

Pakistani doctors carry a mock coffin with cigarette cutouts during a demonstration in Karachi on May 30, 2005

According to the World Health

Organization, one billion and 30 million people in the world smoke , of which 80 percent belong to the poor and middle class. Every year 7 million people die worldwide due to diseases, one of which is smoking.

According to Grandview Research, the global tobacco industry is valued at $867.6 billion and will grow to over $1 trillion by the end of this decade. The total volume of tobacco industry in Pakistan is about one thousand billion rupees.

Two lobbies become very active in Pakistan every year before the arrival of a new budget. One advocates raising taxes on cigarettes so that cigarettes are more expensive and discourages smoking, while the other lobby says that raising taxes on cigarettes increases the supply of illegal cigarettes to the market, thereby reducing smoking. It does not happen, however, substandard cigarettes come into the market, which further deteriorates people's health and also causes the government to lose billions of rupees in tax collection.

How much is the illegal cigarette trade in Pakistan?

The National University of Sciences and Technology released a report last week, which said that the illegal sale of cigarettes in Pakistan has reached 63.5 percent of the total sale of cigarettes and now the brands that sell cigarettes legally. Their volume has shrunk to 36.5 percent.

In this way, only the illegal sale of cigarettes is causing a loss of 310 billion rupees to the government exchequer annually.

Just three years ago, when cigarette taxes were low, in 2021, illegal cigarettes accounted for 36.8 percent of the market, compared to legal cigarettes today. The report said that if the trend continues, the volume of sales of legal cigarettes will further decrease to 29.6 percent by the end of this fiscal year.

There are three types of illegal cigarettes in Pakistan. One is the local brands that do not pay tax, the other is the smuggled brands and the third is the fake brands. Among the three, the largest share is locally produced brands that do not pay taxes.

The report states that local cigarette companies in Pakistan that pay less or no tax have a market share of 52.3% and pay only two billion rupees in tax annually, while on the other hand, two multinational companies have a lower market share. Tax has been reduced to 17.6 percent. They pay 170 billion rupees in taxes annually.

Under the Federal Excise Act, 2005, the price of any pack of cigarettes cannot be kept below Rs 127.44 on which a duty of Rs 119.4 will be applicable. According to Ipsos Pakistan, there are currently 104 brands selling in the market whose price is below the price prescribed in this act.

Only 32 brands in the market have track and trace stickers while 165 brands do not have such stickers at all.

Cigarette politics in Pakistan what are the facts

A man smokes in a slum in Karachi on May 31, 2011, on the occasion of 'World No Tobacco Day'

Cigarette politics has now reached the Houses

Pakistan's Federal Minister of Defense Khawaja Muhammad Asif, while addressing the National University of Sciences and Technology's report release ceremony last week, said that illegal cigarette sellers in Pakistan are so powerful that their representatives have now reached the assemblies. are, who use public office to protect their business interests.

In this regard, contacted the national convener of Act Alliance, Mubasher Akram. Act Alliance is a representative platform of civil society organizations active since 2016 working against illegal trade, tax evasion, smuggling and counterfeit products in Pakistan.

Mubashir Akram says that there is no doubt that the representatives of the Pakistani elite protect their interests by reaching the Houses, even if their actions harm the country.

'The owners of the cigarette industry also fall into this category. Khyber Pakhtunkhwa is famous for the production of tobacco in Pakistan, so several families involved in the cigarette business there have reached the Houses in recent years, among them the Turkai family.

Liaquat Khan Turkai has been a senator from 2015 to 2021. His brother Muhammad Ali Tarkai has been a member of Khyber Pakhtunkhwa Assembly from 2013 to 2023. Another cousin of Liaquat Ali Khan Turkai, Usman Khan Turkai has also been a member of the National Assembly. Liaquat Khan Turkai's son Shahram Khan Turkai, who is currently a member of the National Assembly of Tehreek-e-Insaf, has been a member of the Khyber Pakhtunkhwa Assembly in previous periods and has also been the provincial minister for agriculture and health.

His brother Faisal Khan Tarkai is the current provincial education minister.

Former Awami National Party MNA Haji Naseemur Rahman is also related to the tobacco industry. Ejaz Akram Bacha, who belongs to Swabi, is also associated with the tobacco industry and was a special assistant to the Chief Minister of Khyber Pakhtunkhwa in the interim government.

Another big name associated with the cigarette industry is Senator Dilawar Khan

Mubasher Akram said that since Khyber Pakhtunkhwa produces tobacco and there is also a cigarette industry that pays little or no tax, politically active families have all the resources they need for politics in Pakistan. They are considered indispensable and when they reach the Houses, they also lobby hard for their businesses.'

Speaking to former FBR chairman Shabbar Zaidi said that during his tenure, he wanted to register the furnaces in Mardan that process tobacco before making cigarettes so that it could be gauged how much tobacco is produced. It happens and how many cigarettes are made from it, but the politicians did not allow this to happen.

He said that there are small cigarette factories in Mardan which are fake or make their own brands and are not registered anywhere. We call them as 'Mardanwala' who do not pay any kind of tax.

What do anti-tobacco lobbies have to say?

A recent report by the Social Policy and Development Center of Pakistan states that 31.6 million people in Pakistan, over the age of 15 years, smoke. If the federal excise duty on cigarettes were increased by 37 percent, the increase in cigarette prices would cause 757,000 people to quit smoking, increase cigarette tax revenue by 12.1 percent, and increase the cost of treating tobacco-related diseases. There will be a 17.8% reduction in the expenses. The government will get an additional income of Rs 88 billion through FED and GST.

According to the report of the National University of Sciences and Technology, 551 billion rupees can be received from the tobacco industry in Pakistan in the form of taxes, while the expected income of the taxes received in this regard by the end of this financial year is 242 billion rupees. Because the government treasury is losing 310 billion rupees annually due to illegal cigarette trade in the market.

Shariq M Khan, the CEO of Chromatic Pakistan, told Nox Today that even if full taxes are collected on cigarettes, they are more than the damage Pakistan is suffering from smoking-related diseases.

He said that according to a 2019 report, Pakistan loses 615 billion rupees annually on the treatment of diseases caused by smoking and 167,000 people die annually as a result of diseases caused by smoking.