Islamabad, Pakistan, May 8, 2026: Muhammad Amin, Chairman of Fair Trade in Tobacco (FTT), strongly rejected the latest call by the Sustainable Development Policy Institute (SDPI) for higher tobacco taxes in the federal budget 2026-27, saying the proposal reflects a familiar pre-budget pattern in which local NGOs intensify pressure against the legal cigarette industry while maintaining a convenient silence on Pakistan’s illegal cigarette mafia.
Amin said the SDPI seminar’s recommendations appear to follow the same donor-driven tax template that has been promoted in Pakistan for years, without adequate regard for local market realities, weak enforcement, illegal trade, consumer substitution, and the collapse of the documented tax base. He said the government must not allow fiscal policy to be shaped by advocacy slogans that look impressive in seminar rooms but fail in the marketplace.
“SDPI is again asking the government to increase tobacco taxes as if Pakistan’s cigarette market operates in a textbook,” Amin said. “It does not. Pakistan has a massive illegal cigarette market, weak retail enforcement, under-declared production, smuggling, counterfeit products, and non-compliant brands selling openly below the legal price. Any tax proposal that ignores this reality is not policy advice. It is economic negligence.”
Responding to SDPI’s claim that higher tobacco taxes could reduce smoking, improve public health, and increase revenue collection, Amin said this argument collapses when the illegal market is already large enough to absorb demand displaced from the legal sector. He said Pakistan’s cigarette consumption remains around 80 billion sticks annually, a figure also acknowledged in the discussion reported from SDPI’s own event, yet the legal sector has been continuously losing volume to non-duty-paid cigarettes.
“The real question is simple: if consumption remains broadly stable, but legal sales decline, where has the consumption gone?” Amin asked. “It has gone to the illegal cigarette mafia. That is the part SDPI and similar NGOs prefer not to discuss honestly.”
Amin said that repeated tax shocks have already damaged the compliant sector while expanding incentives for illegal operators. He warned that another aggressive increase in the 2026–27 budget would not automatically create more revenue; it could further shrink the taxable base by pushing consumers toward cheap, untaxed cigarettes. He called this a direct threat to Pakistan’s fiscal stability.
“The legal tobacco sector pays close to one billion dollars in taxes and duties, while the illegal cigarette mafia steals more than one billion dollars from Pakistan every year,” Amin said. “Why does SDPI keep lecturing the government about taxing the legal sector, but does not run equally aggressive campaigns against those who pay nothing?”
FTT said the government should examine the timing, funding, coordination, and policy influence of repeated anti-legal-industry activism by certain NGOs, especially during the months leading up to the federal budget. Amin said it is now necessary to ask why these organizations become most active when tax policy is being finalized, and why their policy demands repeatedly target the documented industry rather than the illegal operators who cause the largest fiscal damage.
“This budget-season activism needs serious scrutiny,” Amin said. “The government should inquire into how these campaigns are funded, who designs their policy agenda, which foreign partners support them, and why their advocacy almost always points toward higher taxes on the compliant industry rather than enforcement against the illegal cigarette mafia.”
Amin criticized SDPI’s recommendation to eliminate the two-tier tax structure and move toward a single-tier system, saying such proposals may sound administratively clean but can become dangerous if introduced without first crushing illegal trade. He said Pakistan’s market has a large price-sensitive consumer base, and sudden narrowing of price gaps through taxation can drive more smokers toward non-duty-paid products rather than make them quit.
“Before talking about a single-tier structure, SDPI should explain how the government will stop consumers from shifting to illegal cigarettes that are already available in every market,” Amin said. “Without enforcement, higher taxation becomes a subsidy for criminals.”
FTT said the policy priority should be reversed. The government should first enforce Track and Trace at the manufacturing and retail levels, shut down illegal factories, stop sales at below-minimum prices, prosecute tax evasion networks, investigate alleged money-laundering channels, and dismantle distribution systems that allow illegal cigarette brands to operate openly.
Amin said NGOs that claim to work for public welfare must be asked why they remain largely silent on illegal cigarettes that evade taxes, avoid health warnings, bypass regulatory controls, and may feed wider criminal economies. He said this silence is not a minor omission; it distorts national policy.
“Pakistan does not need imported tax sermons,” Amin concluded. “Pakistan needs sovereign, evidence-based economic policy. The government must protect the legal tax-paying sector, crush the illegal cigarette mafia, and reject donor-aligned pressure that is disconnected from Pakistan’s fiscal and enforcement realities.”