A newly released nationwide survey has exposed the depth and scale of Pakistan’s illegal cigarette trade, revealing systemic tax evasion and widespread violations of tobacco control laws at the retail level. According to the study, an overwhelming 81.01 percent of cigarette brands available at shops do not carry tax stamps, a clear indication that excise duties are being bypassed on a massive scale. Only 12.03 percent of products were found to be duly tax-stamped. In comparison, another 6.96 percent appeared in both taxed and untaxed forms, suggesting that parallel distribution networks are operating alongside a small pool of compliant brands.
The survey, titled “The Unchecked Rise of Illegal Cigarettes in Pakistan,” was conducted by Stop Illegal Trade (SIT), an advisory forum focused on combating illegal trade in the country. The findings paint a picture of a thriving black market that has penetrated everyday retail environments, from urban convenience stores to neighborhood kiosks in smaller towns. According to SIT, the high prevalence of unstamped packs indicates not just isolated non-compliance but a deeply entrenched system where tax-evading brands have become the norm rather than the exception.
Beyond the missing tax stamps, the survey highlights serious breaches of health regulations. Nearly 47 percent of cigarette brands examined did not display mandatory health warnings on their packaging, in direct violation of national tobacco control laws. Only 53.16 percent of brands were found to be fully compliant with health warning requirements. This means that almost half the products on shelves are sold without the legally required graphical or textual warnings that inform consumers of the risks of tobacco use. For regulators and public health advocates, this level of non-compliance raises concerns about unchecked marketing of dangerous products, especially to youth and low-income consumers.
Price violations add another layer to the problem. The survey documents the frequent sale of cigarettes below the government-mandated minimum retail price of Rs 162.25 per pack. Underpriced, untaxed brands are widely available, undercutting legal manufacturers that pay complete excise and sales tax and comply with packaging laws. These cheaper products make cigarettes more accessible to price-sensitive smokers and new users, including teenagers, undermining public health objectives that rely on higher prices as a deterrent to consumption. At the same time, they erode the competitive position of compliant firms, effectively rewarding illegal operators for breaking the law.
Commenting on the findings, a spokesperson for SIT said the survey lays bare the extent of tax evasion and regulatory weaknesses that have allowed the illegal cigarette trade to flourish. “The survey exposes the extent of tax evasion and regulatory weaknesses that are allowing illegal cigarettes to thrive,” he said. “These practices not only deprive the government of critical revenue but also endanger public health by increasing access to illegal and non-compliant products.” He noted that tax stamps, health warnings, and minimum pricing are three fundamental pillars of tobacco regulation, and the widespread breaching of all three suggests that enforcement has not kept pace with the scale of the problem.
SIT has urged policymakers and enforcement agencies to prioritize retail-level inspections and significantly tighten oversight of supply chains that feed non-compliant brands into the market. The spokesperson called for systematic crackdowns on the distribution and wholesale networks behind these products, arguing that occasional raids are not enough to dismantle the infrastructure of illegal trade. “Without immediate intervention, Pakistan risks further revenue losses and serious setbacks in its public health goals,” he warned, stressing that unchecked availability of illegal cigarette brands could undo gains made through tax reforms and tobacco control policies in recent years.
The survey underlines that illegal cigarettes now account for more than half of Pakistan’s total cigarette market and cause an annual revenue loss of over Rs 415 billion to the national exchequer. This figure represents a significant portion of potential tax income that could otherwise fund health, education, and social protection programs. In the broader context of Pakistan’s fiscal challenges, such losses deepen budgetary pressures, widen deficits, and force the state to rely more heavily on borrowing and external support.
Taken together, the findings of “The Unchecked Rise of Illegal Cigarettes in Pakistan” offer a stark reminder that the fight against illegal trade is not confined to borders and warehouses, but must extend to every retail counter where untaxed and unregulated products are sold. Without coordinated, sustained action that combines enforcement, monitoring, and regulatory reform, the black market for cigarettes is likely to expand further, with heavy costs for both the economy and public health.
This report is based on information first reported by The Nation in its November 9, 2025, story, “81% of cigarette packs in retail market lack tax stamps: survey.”