Islamabad: BAT (BAT) called on the government to reconsider the imposition of heavy taxes on non -smoking products, including fumes, and to take stronger measures against illegal cigarette trade. The company warns that the government may lose 34 billion rupees in tax revenues in the current fiscal year due to the expansion of the black market.
A delegation of the bats and its Pakistani tobacco company (PTC) met with the Minister of Finance, Mohamed Orangazib, this week to discuss these concerns. According to PTC CEO Asad Shah, the sharp increase last year by 2500 % in duties on fumes requires raising prices by at least 3000 % to break it. This led to the exit of PTC from the market, leaving the door open to smuggled fumes to control.
Ptc Sayed Ali Akbar said that the company raised the issue of these excessive duties with the Minister of Finance, who confessed to the negative impact of illegal cigarettes and agreed that the changes in politics are necessary. Bat focuses on expanding its portfolio of products that do not smoke like Vaping and Aral Nicotine Pouches as part of its strategy to stay away from traditional cigarettes. By 2035, the company plans for more than half of its revenues of products that do not smoke, according to Kingsley Witton Corporation. However, Whiton stressed that reaching these goals depends on supporting policy from both governments and public health organizers.
Last year, Bat received 17.5 % of its total revenue from the products that are not smoking. The company actively reduces the health risks associated with tobacco by enhancing alternatives with low health effects.
However, the official tobacco industry in Pakistan suffers due to the high taxes and the aggressive spread of smuggled and unpaid cigarette brands. After the government’s tax height in the last budget, smokers have turned from expensive brands and a tax into cheaper and illegal options. The cigarette’s non -taxable cigarette share increased from 22 % to 54 %, according to BAT.
It is estimated that annual cigarette sales in Pakistan reaches about 79 billion sticks, with 46 billion of those sold in the informal market without paying taxes. As a result of the 200 % confrontation of Al -Makus in 2023, the official tobacco sector has significantly contracted, which led to a decrease in expected revenues for the government. Asad Shah predicts a reduction in revenues of 34 billion rupees – 12 % less than 277 billion rupees that the government received last year from organized manufacturers. Consequently, the official sector sales are expected to decrease by 8.3 % from 36 billion sticks to 33 billion sticks.
Despite the shift to illegal brands, the number of smokers remained stable. Shah also indicated that the government’s path and tracking system, designed to reduce illegal trade, has proven incomplete due to poor application, with the continued sale of smuggled cigarettes in some areas.
Kingsley Wheaton highlights that about 45 % of Pakistani adult population smokes, which is a flagrant contradiction with Sweden, as it reduces the inputs that do not smoke the smoking rate to about 5 %. Whiton also pointed out that the official tobacco sector contributed 900 million dollars to the taxes of the government of Pakistan last year, a number that may be more than twice the sales of illegal cigarettes.
Bat has also launched the OMNI platform in Pakistan, a global initiative to increase awareness and enhance enlightened discussions about tobacco damage. The platform is part of Bat’s broader goal to create a future that does not smoke through scientifically supported innovations.
Bat claims that illicit cigarettes now account for 54 % of the total cigarette consumption in Pakistan, confirming the urgent need to take stronger action against illegal trade.
