ISLAMABAD, May 7, 2026 — Representatives of Philip Morris International raised concerns over illicit cigarette trade, weak enforcement, and regulatory gaps during a meeting with Pakistan’s Commerce Minister Jam Kamal Khan on Thursday.
The delegation, led by Marco Mariotti, President CIS & Central Asia at Philip Morris International, discussed key structural issues affecting Pakistan’s tobacco sector, including undocumented production, supply chain weaknesses, and declining tax compliance.
According to officials briefed during the meeting, Pakistan faces an estimated annual revenue loss of around Rs350 billion due to illicit cigarette trade. Participants said nearly 45 to 47 billion cigarettes are reportedly sold without payment of taxes, undermining the formal sector and distorting market competition.
The discussions focused on procurement of tobacco leaf, under-reporting of production, and weak traceability systems that allegedly allow undocumented manufacturers to access raw materials and expand operations outside regulatory oversight.
Officials noted that the issue extends beyond tax evasion, touching broader concerns related to undocumented income flows, money laundering risks, and economic distortions.
The delegation stressed that Pakistan already has laws, tax stamp systems, and regulatory frameworks in place, but implementation and enforcement remain inconsistent. Participants called for stronger coordination among federal and provincial authorities to curb illegal trade.
The role of the Pakistan Tobacco Board also came under discussion, with stakeholders emphasizing the need to strengthen the institution’s monitoring and documentation capacity.
The meeting additionally reviewed policy challenges linked to Pakistan’s commitments under the International Monetary Fund programme, particularly trade liberalization measures that may complicate controls over key manufacturing inputs.
Jam Kamal Khan described the issue as a “multi-layered challenge” requiring coordinated action from farm-level regulation to retail enforcement. He said the core problem was not the absence of policy but weak implementation.
The minister reaffirmed the government’s commitment to supporting the formal sector, improving enforcement mechanisms, promoting exports, and ensuring a transparent business environment.
Both sides agreed to continue engagement on measures aimed at improving traceability, reducing illicit trade, and protecting government revenues and farmer incomes.