The Revenue Loss Due to Illicit Cigarette Trade in Pakistan

This Policy Brief was developed by Social Policy and Development Centre (SPDC) in Pakistan. The policy brief analyze the revenue loss from illicit trade using based on a survey of more than 6,600 smokers. The researchers estimate that total cigarette consumption is around 53.55 billion sticks, with an estimated 18.32 billion sticks, or 34.2%, of illicit trade. The tobacco industry, on the other hand overestimates these numbers, claiming that total consumption is 82 billion sticks, with between 56% and 58% of illicit. 39% of illicit trade, or 7.2 billion sticks, is locally produced, which suggests that total domestic production (both licit and illicit) amounts to 42.4 billion sticks. Given these inputs, the revenue loss from illicit trade amounts to approximately Rs 115.6 billion, or US $411 million. In contrast, the industry claims that these revenue losses equate to over Rs 400 billion for the government. The policy brief concludes with recommendations for policy makers to strengthen the implementation of the track-and-trace system and other enforcement strategies.