KARACHI, May 26: Kaghzi Bazaar is one of many markets in town that supply bulk of illegal packets of under-the-counter cigarettes. With millions of cigarette sticks on roll, it provides plenty of puff to an intricate network involved in their distribution across the country.When one dealer in Kaghzi Bazaar sells a pack, popularly called a ‘danda’, of the most popular Korean cigarette ‘Pine’ to shopkeeper he slips at least 20 rupees into his pocket. The profit is much higher on illegal brands more popular among people whose affordability is much higher.

Just on the Pine brand of cigarettes, which are among the cheapest of the lot as its one packet is available at Rs35 to Rs40, fetches Rs4 to Rs5 for a vendor.

The dealers in town and in the rest of Sindh are supplied with illicit cigarettes in bulk by the network based at Sohrab Goth, as a recent report compiled by the Directorate Intelligence and Investigation — Inland Revenue (I&I-IR) suggested.

Similarly, a network in Peshawar supplies illicit cigarettes to Khyber Pakhtunkhwa and Punjab and another in Chaman is meant for Balochistan.

It is, in fact, an international network, which works between Afghanistan and Pakistan. A huge part of Pine cigarettes imported for Afghanistan is illegally sold in the length and breadth of Pakistan, sources said.

The directorate general of the I&I-IR has once again launched a campaign against illicit cigarette brands, especially against Pine, which is in high demand of Pakistan’s smokers, who form 36 per cent of its male and nine per cent of female adults, because of its easy availability, affordability and a class touch of being imported.

They are much cheaper than the mainstream brands and carry no health warnings. In a fresh newspaper advertisement, the I&I-IR highlighted a Pine Lights cigarette packet with a red cross on it. The ad shows the packet carries neither a pictorial health warning nor the warnings in Urdu and for underage (less than 10 years) children. Besides, Pine’s packet does not show the retail price, which is mandatory under the law of land and meant to fetch bulk of money in taxes.

The advertisement declares: “Sale and purchase of smuggled Korean manufactured brand Pine and other smuggled packs are illegal and attract the penalties of confiscation of cigarettes, fine of up to Rs50,000, recovery equal to 500 per cent of unpaid taxes, imprisonment up to five years.”

Pine is not the only brand. Right from Marlboro, Dunhill to Camel, several brands are available in the market, but officials said Pine enjoyed an overwhelming share deserved to be caught on priority.

Some brands have marking saying ‘Duty Free South Asia”, others ‘Duty Free GCC’ and many are without any markings, but Pine has the route, which comes from its land of manufacturing Korea to the United Arab Emirates, Afghanistan and Pakistan.

It is not the first time when the Federal Bureau of Revenue has launched such a drive. However, it has been consistent for the last six months or so to warn public through advertisement etc.

Sources said the officials concerned launched a series of swoops in parts of the country, confiscated illicit cigarettes and sealed some local factories, which were manufacturing fake international brands.

The I&I-IR established an Anti-Illicit Tobacco/Cigarettes Trade in Pakistan (AIT/CTP) cell in February last year, which conducts researches, coordinates with stakeholders and takes action against the illicit business.

Officials said since its inception, it has confiscated around 50 million sticks of untaxed and smuggled cigarettes. During 11 months of the current fiscal year, which ends on June 30, the number of sticks seized is 36 million. They included three million sticks of foreign cigarettes, 29.8 million locally-manufactured untaxed sticks and 3.2 million sticks made in Azad Jammu and Kashmir (AJK).

Officials said raids conducted against several dealers, mainly in Lahore and Faisalabad, who were involved in illicit tobacco business and in one swoop they caught a theft of Rs230 million.

“We also do investigative audit, which includes calculating how much tobacco is being purchased by a factory and how many sticks are being shown to be manufactured,” said an official.

Urban centres such as Karachi, Lahore and Islamabad had been targeted to ‘sensitise’ the shopkeepers about the illegal trade they were involved in. I&I-IR officials targeted shops in Karachi’s Clifton neighbourhood and Lahore and Islamabad’s DHA and Supermarket areas, where they warned shopkeepers to shun the illegal trade.

However, visibly no such actions have been acknowledged in Karachi – neither through independent sources, nor by official channels.

From five-star hotels to super markets in the upmarket areas to roadside paan cigarette shops, the smuggled brands are being sold openly at the cost of the local taxpaying industry.

A visit to a market and several shops selling cigarettes show none of those involved in the business are perturbed. In fact, for many of them, a question about official action against the trade of illegal brands was ‘breaking news’.

“Why should we be taken to task? We are just selling cigarettes and smoking is not banned in Pakistan,” said Abdul Ghaffar, a dealer in Kaghzi Bazaar.

A shopkeeper on I.I. Chundrigar Road expressed his unawareness of any campaign against the counterfeit and illegally-smuggled cigarettes, which happened to be widely sold in the market.

“Nobody has told me about this and why against this particular cigarette, it is one which is sold hugely in the market,” he said.

The I&I-IR’s cell is establishing a toll-free helpline, where people have been advised to inform officials about illegal cigarette trade. Besides, three of ‘mini-units’, small-sized factories which are run by perpetrators to evade official raids and are generally called ‘alternative arrangements’ have been seized in Bara Market, Sargodha and Bahawalpur’s Samma Satta town.

The tobacco business fetches over Rs70 billion annual revenue to the national exchequer. The illicit trade steals around Rs10 billion from the country’s earnings, which includes the illegal foreign cigarette trade and untaxed cigarettes manufactured in Pakistan and AJK.

Officials say Pine cigarettes are causing a loss of over Rs5 billion. The country is flooded with other foreign brands as well.

“We are for now focussing on one main brand, which is hurting our economy the most. The rest would be easy to be tackled once we successfully get rid of this menace,” said an official.

Pine cigarette is supplied by a dealer based in the UAE to Afghanistan from where it enters Pakistan through the Torkham and Chaman borders.

Officials said a porous Pakistan-Afghanistan border was not easy to be manned, particularly when the country was facing militancy in its southwest and northwest.

I&I-IR officials said the smuggled cigarettes had become a huge source of income for the militants in the country’s badlands.

“The militants on our borders with Afghanistan get their part in the fortune. Apart from them, some black sheep in our law enforcement agencies are also involved in this business by allowing the trucks carrying illicit cigarettes to enter our mainland. They all share the fortune,” said an official.

Recently, a mobile team of the I&I-IR in Peshawar was on surveillance on Ring Road, Peshawar. They tried to stop a vehicle suspected of carrying cigarettes. The vehicle was accompanied by two cars. Smugglers in the car overcame the team while policemen standing nearby opted to remain silent, said an official.

Trucks come to large warehouses in Karachi’s Sohrab Goth from Chaman, while from Torkham they go to Peshawar and Punjab.

Apart from this, Pakistan has its local manufacturers mainly in Mardan and Swabi, which pay not more than 10 per cent taxes.

I&I-IR officials admitted that their own officials deputed on those factories helped the illegal business.

“A truck, which gets going without paying taxes on cigarettes it carries, causes a loss of up to Rs3.5 million to our exchequer,” said an official.

Similarly, they have established their units in Mirpur, AJK, which gets turbo manufacturing when local manufacturers slow down in Mardan and Swabi because of official severity.

An official said the Federal Board of Revenue had lately written a letter to the South Korean diplomatic mission, in which it has complained about the illegal flooding of the Korean cigarette brand in Pakistan causing huge monetary losses to Pakistan.