ISLAMABAD : Federal Minister for Commerce Jam Kamal Khan has assured the tobacco industry that the government will carefully examine its proposals regarding taxation, enforcement against illicit trade, and measures aimed at strengthening Pakistan’s documented economy while promoting investment and exports.
The assurance came during a meeting with a delegation of Pakistan Tobacco Company (PTC), which discussed budget-related proposals, challenges facing the tobacco sector, and measures required to curb the growing illicit cigarette trade.
The PTC delegation informed the Minister that strengthened enforcement measures over the past year had contributed to a reduction in the share of illicit cigarettes in the market, resulting in improved government revenues and growth in the documented sector. The delegation noted that continued enforcement against non-duty-paid and smuggled cigarettes could further enhance tax collection and create a more level playing field for legitimate businesses.
The delegation also highlighted concerns regarding the increasing influx of smuggled tobacco products, particularly through border regions, and requested stronger action against illicit trade networks. PTC emphasized that cigarettes have become one of the most lucrative smuggled products, causing substantial losses to the national exchequer and undermining compliant manufacturers.
The company urged the government to restore a simplified Final Tax Regime (FTR) mechanism for imports and to rationalize tax policies in a manner that discourages illicit trade while encouraging documentation and investment. It also called for broadening the tax base by bringing the undocumented sector into the formal economy rather than placing additional burdens on existing taxpayers.
The delegation further pointed out that Pakistan’s business community is facing multiple challenges, including high taxation, elevated financing costs, increasing compliance requirements, and provincial levies, all of which are affecting competitiveness and discouraging investment. Concerns were also expressed regarding the migration of skilled professionals, with businesses finding it increasingly difficult to retain experienced human resources.
Speaking on the occasion, Jam Kamal Khan acknowledged the industry’s concerns and stressed the importance of maintaining a balance between revenue generation and economic growth.
“The formal sector should be encouraged and facilitated, as it remains the backbone of economic activity, investment and employment generation. Sustainable revenue growth will come from expanding the tax net and bringing undocumented economic activity into the formal economy,” the Minister said.
He observed that Pakistan possesses significant economic potential due to its strategic geographic location and must create a business-friendly environment capable of attracting both local and foreign investment.
“The world is actively competing for investment. Pakistan must ensure that its policies promote confidence, facilitate business growth and strengthen the country’s attractiveness as an investment destination,” he added.
The Minister noted that the Prime Minister and economic team are actively engaging with stakeholders and are receptive to constructive recommendations from the private sector. He invited PTC to formally submit its proposals regarding taxation and enforcement so that they could be taken up with the relevant authorities for consideration.
Jam Kamal Khan also emphasized the need for stronger coordination among federal and provincial institutions to reduce unnecessary business costs and streamline the regulatory environment. He reiterated that the Ministry of Commerce remains committed to supporting policies that enhance exports, promote industrial growth, encourage investment and strengthen Pakistan’s documented economy.
The meeting concluded with an understanding that continued dialogue between the government and industry stakeholders would help formulate practical policy measures that support economic growth, increase revenue collection and curb illicit trade.
