Pakistan: Illicit tobacco trade, contributing factors need to be addressed

Source from:  Daily Times  09/26/2013

Illicit trade of counterfeit cigarettes cannot be tackled simply through punitive measures against the culprits but it also requires addressing certain factors that contribute to this ever-growing illegal business.

According World Health Organisation (WHO) estimates, around 600 billion illegal cigarettes were being consumed around the world that not only fuelled the organized crime, damaged economies but also the legal cigarettes industry, which was at the receiving end despite abiding by health regulations, tax laws and other regulatory measures.

According to the available data, situation in Pakistan is not different from the rest of the world and here too the increase in the illegal trade of counterfeit cigarettes leads to more then Rs 10 billion loss to the national exchequer per annum There are numerous factors that contribute to the fast spreading illicit trade of fake cigarettes such as huge profits involved with comparatively low risk of punishment. Hence not only individuals but much more organized criminal networks are involved in this business.

Apart from the profits' factor, the experts in the legal tobacco industry mention some other important reasons that also contribute to flourishing of this unlawful trade. "There is price differential between the grey market and regular market that encourages smuggling of counterfeit cigarettes," PIDE, Islamabad Research Economist Dr Nasir Iqbal said. Enditem