The Exaggerated Estimates of Pakistan’s Illicit Cigarette Trade

In March, the tobacco industry launched an extensive media campaign, making exaggerated claims about the illegal cigarette trade in Pakistan and advocating for tax reductions. This campaign has been widely publicised, attempting to paint a picture of rampant illicit trade in the cigarette market, allegedly causing significant revenue losses to the government. However, the data and methodologies used to support these claims appear to be misleading, creating an inflated perception of the extent of the problem.

As reported in various newspapers, the Institute for Public Opinion Research (IPOR), based on a survey of retailers, claimed that 54% of cigarette brands sold in Pakistan were illicit. According to the report, this alleged illicit trade resulted in an annual loss of around PKR 300 billion ($1.1 billion) in taxes and duties.

However, a closer examination of the survey methodology and the way its results have been reported raises serious concerns about its accuracy and objectivity. The figure of 54% was determined by assessing the number of brands found non-compliant with tax stamp regulations and graphic health warnings.