ISLAMABAD, July 21: Widespread smuggling of internationally renowned brand cigarette into the country via Afghanistan is causing loss of billions of rupees to national kitty in terms of excise revenue.
Reports said that country is losing revenue over Rs24 billion every year due to illegal cigarette trade.
These smuggled brands are being sold in the market without any pictorial health warning and do not have “Made in Pakistan” stamp on them, which is mandatory by Pakistani Law, or these brands will have warnings in foreign languages. As per the Framework Alliance Report of 2010, a WHO associates, smuggled cigarettes are sold in the Pakistani as a means of entering closed or high tax-levied markets. These smuggled brands sell as low as Rs. 20 to as high as Rs. 160.
As per the Report, the tobacco smuggling network operates around the Afghan Transit Trade (ATT) Agreement, which was signed between the landlocked country of Afghanistan and Pakistan in 1965 with a view to provide Afghanistan with port access.
As per the agreement, goods intended for Afghanistan are allowed to be transported from the ports of Karachi and Bin Qasim, in south Pakistan, to Afghanistan via the northern border towns of Torkham in the KPK and Chaman in Balochistan.
This facility provided to Afghanistan by Pakistani Government is being misused as the goods destined for Afghanistan are either being pilfered inside Pakistan while on their way to the border or are being smuggled back into the country after reaching Torkham or Spin Baldak in Afghanistan.
As per the Report there is a big question mark alongside whether the proceeds from cigarette smuggling are funding terrorism in Pakistan. The Report states that smuggling involves middlemen who ensure safe and timely delivery of goods at an agreed location. Middlemen bear the responsibility for bribing officials or any mafia that may come in the way of transportation. It is anticipated that fees for protection and passage reach militants who control the smuggling routes.The Torkham-Peshawar route in Khyber agency was reportedly controlled by the banned militant organizationLashkar -e-Islami’sMangalBagh, which charged a passage fee for goods passing through its territory. Now the route is controlled by law enforcement agencies. But protection money also needs to be paid to a local warlord along the Spin Baldak-Chaman route.UNODC estimates that the Taliban armed opposition group has generated annual revenue of between US$200 million and 300 million via a “surcharge” levied on the illicit drug trade.
Pakistan Tobacco Company (BAT) and Phillip Morris have more than 80% share of the country’s cigarette market. The Report alleges that these companies are cleverly exploiting unbridled smuggling and the counterfeit market only by crying foul.