Despite falling by 14.0% in 2017, Illicit Consumption remained high in Pakistan at 41.9% of Total Consumption.

Illicit Consumption is primarily composed of Domestic Illicit cigarettes, accounting for nearly three-quarters of total Illicit Consumption. Non-Domestic Illicit, which fell by more than 20% in 2017, consists mostly of Unspecified Market Variant products. The most prevalent brand found in the Empty Pack Survey was “Pine”, accounting for 46.5% of total Inflows of Unspecified Market Variant cigarettes.

The decline in Illicit Consumption coincides with a series of regulatory and enforcement initiatives aimed at reducing the volume of illicit cigarettes consumed, which included a restructured Federal Excise Tax system.

The Tax Loss (including GST) resulting from Illicit Consumption declined by an estimated 11.5% to PKR 59.3 billion. Lost excise revenues represented 37.7% of total potential Excise Tax receipts in 2017.