Islamabad: A high-level meeting between Philip Morris International and Pakistan’s Federal Minister for Commerce, Jam Kamal Khan, addressed pressing issues in the country’s tobacco sector, including rampant illicit trade, regulatory gaps, and potential avenues for export growth.

According to Press Information Department, Marco Mariotti, President CIS and Central Asia at Philip Morris International, led the delegation, which highlighted the significant impact of the illicit cigarette trade in Pakistan. The delegation reported that nearly 45 to 47 billion cigarettes are sold annually without tax payments, resulting in an estimated revenue loss of Rs350 billion. This scenario creates an uneven playing field for the formal tobacco sector, as the market remains largely undocumented.

The discussions delved into structural challenges within the tobacco supply chain, such as tobacco leaf procurement, production under-reporting, and inadequate traceability mechanisms. The delegation noted that while registered companies adhere to strict regulatory frameworks, informal players exploit regulatory loopholes to access raw materials, fueling illicit manufacturing.

Participants underscored that the challenges extend beyond taxation, touching on issues of undocumented income and money laundering. The meeting emphasized the need for robust enforcement, with the delegation calling for coordinated actions by federal and provincial authorities to ensure consistent implementation of existing laws and regulations.

The role of the Pakistan Tobacco Board was also scrutinized, with calls for its restructuring to enhance its capacity for documentation and monitoring. Policy challenges linked to Pakistan’s commitments under the International Monetary Fund programme were also reviewed, focusing on how they might affect efforts to control cigarette manufacturing inputs.

Federal Minister Jam Kamal Khan characterized the situation as a “multi-layered challenge” requiring comprehensive solutions spanning from production to retail enforcement. He stressed the importance of aligning federal and provincial efforts to effectively regulate tobacco cultivation and markets.

The meeting concluded with a commitment to continued cooperation between the government and Philip Morris International. Both parties agreed on the importance of strengthening enforcement mechanisms to curb illicit trade, promote exports, and protect government revenues and farmer incomes.