Islamabad – ACT Alliance Pakistan welcomes the Government of Pakistan’s intensified actions against illegal trade, smuggling, and tax evasion over recent months. These operations are strengthening the rule of law, protecting compliant businesses, and sending a necessary signal to domestic and international investors that Pakistan intends to defend the documented economy.
Pakistan’s illegal economy has reached a scale that can no longer be treated as routine leakage. The Pakistan Business Council estimates that smuggling, under-invoicing, mis-declaration, counterfeiting, and adulteration together equal about $68 billion annually and generate an estimated tax loss of about Rs. 8 trillion, roughly 85 percent of the FY24 tax target.
Recent enforcement actions show a clear shift from episodic crackdowns to coordinated operations. Pakistan Customs reported multi-city intelligence-based actions targeting smuggled cigarettes and raw materials used in illegal cigarette manufacturing, with recoveries valued at over Rs. 1.1 billion. In Khyber Pakhtunkhwa, Customs Enforcement Peshawar reported anti-smuggling operations valued at Rs. 74.4 million, including seizures involving foreign-origin cigarettes, tyres, and non-duty-paid cosmetics. In southern Punjab, Customs Enforcement Multan seized smuggled cigarettes worth Rs. 21.134 million, including 10,701 outer packs and 2.14 million sticks, reinforcing a consistent operational posture.
The government’s actions are also expanding across routes and product categories. At Sost Dry Port in Gilgit-Baltistan, Pakistan Customs foiled a major smuggling attempt valued at about Rs. 157.727 million, seizing mobile phones and assorted weapon parts. They prohibited items, with estimated duties and taxes of about Rs. 78.547 million. In Karachi, Pakistan Customs carried out a major operation against smuggled foreign-origin fabric despite violent resistance, reflecting the risks enforcement teams face when they disrupt entrenched urban distribution networks.
ACT Alliance Pakistan particularly recognizes the government’s sharper focus on the cigarette sector, one of the country’s most tax-sensitive industries. An official FBR release states that illegal cigarette manufacturing and trade are estimated to cause an annual revenue loss of nearly Rs. 250-300 billion. The same release describes a multi-layer enforcement plan, including the deployment of around 120 Pakistan Rangers personnel at Green Leaf Threshing units and the posting of more than 200 dedicated monitors inside factories under relevant tax statutes.
These interventions strengthen monitoring of production and supply chains, which is essential for restoring predictability in a heavily taxed market.
Mubashir Akram, Country Director, ACT Alliance Pakistan, said: “When the state acts consistently against illegal businesses, it protects every compliant taxpayer and every documented investor. This is what market confidence looks like in practice. Enforcement must be sustained, expanded, and insulated from political pressure so that compliance becomes the competitive advantage, not a handicap.”
He added, “Business voices have repeatedly made the same point. When illegal trade is allowed to thrive, it undermines formal sector growth and rewards evasion. When enforcement is consistent and system-wide, it strengthens the investment case for the local and international Pakistan Business Council
ACT Alliance Pakistan urges the Government of Pakistan to sustain this momentum through year-round, cross-agency coordination and through visible prosecution of major offenders. A durable enforcement system, supported by transparent reporting and credible follow-through, can convert chronic leakage into higher revenues, stronger investor confidence, and a more stable economic trajectory.