Pakistan to Seize Untaxed Cigarettes Nationwide in New Crackdown
ISLAMABAD: Pakistan is intensifying its fight against untaxed tobacco products. Under a new Statutory Regulatory Order (SRO 1279 of 2025), issued following the enactment of the Finance Act 2025, authorities will now seize cigarettes found without official Federal Board of Revenue (FBR) tax stamps across the country.
This significant move grants broader enforcement powers to officers of the Inland Revenue Service (IRS) and designated provincial officials. Their mandate is to effectively curb the sale and distribution of illicit tobacco products.
The SRO specifies that various provincial revenue and excise officials, including Deputy Commissioners, Assistant Commissioners, Excise and Taxation Officers (not below BS-16), and their equivalents, are authorized to conduct seizures. This authority extends to cigarettes found in retail outlets, warehouses, and even motor vehicles on the roads, under the powers conferred by sections 26 and 27 of the Federal Excise Act, 2005.
Record Tax Collection and Ongoing Challenges
This crackdown builds on recent successes in tobacco control. According to the World Health Organization's (WHO) Global Tobacco Epidemic Report 2025, Pakistan collected a record-breaking Rs 298 billion (approximately $1.1 billion) in tobacco taxes in 2024. This impressive figure followed a series of bold fiscal reforms that also led to a more than 28% reduction in cigarette production, marking a rare but powerful victory in the nation's efforts to combat tobacco use.
The WHO lauded Pakistan's tax hikes, implemented between 2022 and 2023, as a model of evidence-based policymaking. These reforms notably tripled cigarette taxes, doubled the minimum price of cigarettes from Rs63 to Rs127, and increased the overall tax share in retail prices.
However, despite this substantial progress in taxation, the WHO report issues a cautionary note: Pakistan still lags dangerously behind in fully implementing a comprehensive spectrum of tobacco control policies. The new SRO aims to address a critical aspect of this challenge by targeting the untaxed segment of the market directly.
