Slow action against tax evasion in cigarette industry in Pakistan: political pressure revealed

Islamabad: There has been an alleged slowdown in the action against cigarette companies involved in tax evasion in Pakistan, the main reason for which is being said to be political pressure and the support of influential figures.

According to sources, field officers of the Federal Board of Revenue are avoiding initiating or pursuing such cases in some areas in which the names of companies linked to politically influential people are mentioned. This situation has significantly affected the pace of enforcement actions.

Senior officials say that criticism of tax officials in parliamentary committees and interference of political figures have created an uncertain environment within the institution, due to which officers are hesitant to take strict action.

The matter became more complicated when investigations into the disappearance of seized cigarette stocks in Khyber Pakhtunkhwa began. In 2024, teams from the Peshawar Regional Tax Office allegedly seized 1,262 cartons of non-duty cigarettes, including products without track and trace and with suspected fake tax stamps.

The goods were kept in temporary warehouses in Shahbaz Garhi, Mardan, but a large part of it later disappeared due to security lapses. Later, some of the goods were recovered and shifted to Swabi, but there were complaints of a shortage of stock there too.

According to sources, the investigation of the case was first transferred to the local police and then to the Federal Investigation Agency, but political interference led to differences in the investigation.

Officials say that as a result of all this, the risk of enforcement actions within the institution has increased while institutional support appears weak, which is likely to affect the transparency of the tax system.