Pakistan launches crackdown against illicit cigarette trade: Bilal Azhar Kayani

PakistanPakistan launches crackdown against illicit cigarette trade: Bilal Azhar KayaniBy Jahangir Khan-Apr 15, 2026ISLAMABAD: In a decisive move to curb the booming illicit tobacco market, the federal government, in coordination with provincial authorities, has announced a nationwide crackdown on the sale of illegal cigarettes. Speaking at the launch ceremony of a research report by Oxford Economics on illicit cigarette trade in Pakistan, Minister of State for Finance Bilal Azhar Kayani has said that provincial governments will intensify enforcement operations to eliminate the widespread availability of untaxed cigarette brands. He stressed that controlling the illegal cigarette trade has become “unavoidable,” warning that the unchecked market is inflicting heavy losses on the national exchequer, undermining the documented economy, and discouraging honest taxpayers. He added that several illegal cigarette manufacturing units have already been shut down, while raids against retailers involved in the sale of illicit products are ongoing. According to the report by Oxford Economics, An Economic Assessment of the Illicit Cigarette Market in Pakistan, illicit cigarettes now account for more than half of Pakistan’s tobacco market, according to a new study by Oxford Economics, underscoring the scale of illegal trade and its impact on public revenues and the economy. Report further revealed that illicit cigarettes in the country amount to 43.5 billion cigarettes, placing Pakistan amongst the highest illicit cigarette markets globally. While total cigarette consumption has remained broadly stable at around 80 billion sticks annually over the past decade, legal sales have been steadily displaced by illicit products. The report identifies sharp excise duty increases as a key driver of this shift. Between Q1 2022 and Q2 2023, real excise taxes rose by 107%, significantly widening the price gap between legal and illegal cigarettes. Illicit cigarettes remained approximately 36%...