New Delhi, April 7 (IANS) Large-scale tax evasion in Pakistan’s tobacco sector, resulting in estimated annual losses of over Rs 300 billion, has emerged as a major concern amid the country’s worsening fiscal stress, according to a local media report.

The report by The Express Tribune highlighted that the illicit cigarette trade continues to significantly erode government revenues, even as authorities struggle to meet tax targets and manage a widening budget deficit.

Pakistan’s fiscal position has come under increasing pressure due to geopolitical uncertainties and weak revenue mobilisation, it said.

Data cited in the report showed that the Federal Board of Revenue (FBR) missed its March tax target by Rs 185 billion, collecting Rs 1,182 billion against a target of Rs 1,367 billion.

The persistent shortfall has forced the government to cut development spending across key sectors, including infrastructure, water, power and provincial projects, raising concerns over long-term economic growth.

The report noted that despite the scale of losses from the tobacco sector, enforcement remains inadequate, with gaps in monitoring and weak implementation of track-and-trace systems allowing illegal manufacturing and smuggling to continue.

It further pointed out that repeated reliance on taxing already compliant sectors, instead of addressing leakages, is exacerbating fiscal imbalances and limiting sustainable revenue generation.

Moreover, curbing tax evasion in the tobacco sector could significantly reduce the revenue deficit and create fiscal space for welfare and development spending, while improving the country’s ability to withstand internal and external economic shocks.

Earlier, another report highlighted that Pakistan’s total public debt rose from Rs 71 trillion (Pakistani rupee) to Rs 80.5 trillion in 360 days, a Rs 9 trillion increase across a period the government has described as one of economic stabilisation.

It further stated that the increase translates to Rs 26 billion borrowed every day, including 19 gazetted public holidays.

–IANS

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