Pakistan’s tobacco controls exist, authority does not

Nearly four years after Pakistan introduced the Track and Trace System for cigarettes, the debate should have moved beyond installation and into enforcement. Instead, a new nationwide survey suggests that, while formally in place, the system is still struggling to impose order on the market it was meant to regulate. The latest findings come from the Institute for Public Opinion Research, which has tracked compliance trends in the tobacco sector over the past three years. After its first assessment from August to December 2024, IPOR conducted a second nationwide survey in November and December 2025, covering 1, 520 retail outlets across 38 markets in 19 districts. That scope makes the findings difficult to dismiss as local distortion or isolated irregularity. What they show is a market where non-compliance remains visible, widespread, and commercially viable. This survey identified 477 cigarette brands in circulation. Of these, 455 cigarette brands were non-compliant with at least one regulatory requirement. The breaches included a missing Track and Trace Stamp, an absent Graphical Health Warning, and the lack of printed retail prices. There has been some improvement since 2024, but the overall picture remains troubling. When nearly half the market still fails to meet basic rules, the issue is not a temporary implementation lag. It is a structural weakness. The survey also makes clear that Pakistan is not dealing with a single stream of illegality. Smuggled cigarette brands without graphical health warning and track and trace stamps continue to move through informal channels, while locally manufactured duty-not-paid brands are also widely available. That matters because it shows the problem is not limited to border leakage. It reaches into domestic production, distribution networks, and retail practices. In effect, the regulatory system is being challenged from multiple directions at once. Pricing reveals the scale of the distortion more clearly than any official statement. The government’s minimum legal price is PKR 162. 25 per pack, a threshold intended to support both tax recovery and public policy objectives. Yet the survey found that 392 brands were being sold below this level. Some packs were available for as little as PKR 50. At that point, the issue is not hidden inside technical non-compliance. It is sitting openly on shop counters. Such price gaps do more than attract buyers. They reward evasion and punish compliance. Consumers in a price-sensitive market are naturally pulled toward cheaper options. Meanwhile, compliant brands carry the full burden of taxation, stamp requirements, warning labels, and formal pricing rules. The outcome is a market in which following the law becomes commercially costly, while ignoring it remains commercially advantageous. That is not simply a regulatory flaw. It is a perverse incentive built into the retail environment. The revenue implications are substantial. When underpriced and untaxed cigarettes remain widely available, tax losses cease to be occasional leakages and become part of the market’s everyday structure. Under such conditions, the state cannot reasonably expect to recover the revenue that full compliance should produce. The damage is persistent, not incidental. This is what makes the Track and Trace System’s underperformance especially serious. In principle, the system is sound. Digitally verifiable stamps should help monitor production and distinguish lawful trade from the illegal segment. But the survey found that hundreds of brands lacked the required stamps, and only a small number (22 cigarette brands) were consistently compliant across all surveyed districts. This weakens the system’s credibility where it matters most, at the point of sale. Retailers are not unaware of the rules. A large majority reported familiarity with the Track and Trace System and its purpose. Yet many continue to stock and sell non-compliant products without serious consequences. That shifts the problem away from awareness and back to enforcement. A rule that is widely known but rarely feared is not regulating the market. It is merely describing it. The report also raises concerns about complementary tools. The Federal Board of Revenue’s TransAct application, designed to track compliant tobacco products, appears not to be functioning effectively. A weak supporting tool does not just fail on its own terms. It also reduces visibility across the wider supply chain and leaves room for non-compliance to keep moving. Regional data adds another warning. Rural markets showed 56 percent non-compliance, compared to 42 percent in urban markets. That suggests thinner monitoring outside major cities. But urban figures are hardly reassuring. Non-compliant brands remain deeply entrenched there as well, indicating the problem is national, not peripheral. What emerges from the IPOR data is a picture of two cigarette markets operating side by side. One is regulated, taxed, and compliant. The other is cheaper, weakly monitored, and durable enough to keep expanding. Pakistan does not lack policy in this area. It lacks consistent control. If nearly half the market still sits outside the rules after four years, then incremental adjustments will not be enough. Enforcement, monitoring, pricing discipline, and institutional coordination all need a more serious reset. Otherwise, the gap between regulation and reality will remain wide, and the parallel cigarette market will continue to operate with more confidence than the formal system meant to contain it. Copyright Business Recorder, 2026

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