ISLAMABAD: Pakistan’s Federal Board of Revenue (FBR) has stepped up its enforcement drive against tax evasion in the cigarette industry, sealing several production units and alleging large-scale tax fraud involving billions of rupees.
According to details, the crackdown was conducted under a “zero tolerance policy” on tax evasion, following strict directives attributed to Prime Minister Shehbaz Sharif. Officials said the campaign specifically targets illegal and smuggled cigarette production networks operating across the country.
Government sources claim that 710 enforcement actions have been taken against illegal and smuggled cigarette operations during the current fiscal year up to March.
In one major raid in November 2025, the Regional Tax Office Peshawar reportedly conducted an operation in Mardan, where a warehouse belonging to a large tobacco company was raided. Despite armed resistance, authorities seized around 200 cartons of undeclared cigarettes and sealed the facility.
Authorities further stated that two individuals linked to the factory were detained for allegedly attempting to relocate machinery illegally. In a follow-up action in December 2025, machinery and raw materials worth millions were confiscated in earlier investigations.
Officials also alleged that after intensified enforcement in Khyber Pakhtunkhwa in previous years, several companies relocated units to Azad Kashmir and later shifted heavy machinery to interior Sindh to evade taxation and regulatory monitoring. These units are now reportedly operating covertly and supplying untaxed cigarettes across the country.
The FBR has stated that it is tightening its enforcement net against such networks as part of ongoing efforts to curb illicit trade and recover lost tax revenue.
