Pakistan’s Federal Board of Revenue (FBR) has uncovered a major tobacco scandal involving the alleged repackaging of expired and smuggled foreign cigarette brands.
Authorities say the products were reportedly imported under Export Processing Zone (EPZ) incentives before being sold into local markets.
During a raid at M/s Pioneer Tobacco & Trading Company in Karachi’s EPZ, enforcement teams confiscated around 4.5 million cigarette sticks.
Brands allegedly included international names such as Marlboro, Camel, and Benson & Hedges Nero variants. Officials also seized cigarette paper, filters, and sheesha products believed to be expired or near expiry.
Alleged tax evasion concerns
Industry sources say smuggled cigarettes made up about 11% of Pakistan’s cigarette market in 2025, contributing to large losses in tax revenue.
Experts believe the EPZ tax exemptions, originally designed to encourage exports and investment, may have been misused to bring in low-cost stocks from international black markets.
Reports suggest expired tobacco products were bought cheaply abroad, where distributors often reject them due to quality concerns.
Tobacco generally has a limited shelf life, after which flavour quality drops and chemical changes can occur, making storage conditions important for safety.
Corporations under scrutiny
Investigators are also looking into business links across several tobacco-related companies.
Individuals associated with the Karachi-based business group are reportedly connected to multiple firms involved in cigarette production, packaging, and machinery trading.
Some local cigarette brands are said to be produced by associated factories, while authorities suspect repackaging operations may have been used to hide original manufacturing and expiry information.
Companies involved have denied any authorisation from international brand owners to import or reproduce their products.
Wider implications
Officials say the case raises concerns about regulatory oversight and compliance within EPZ facilities. The alleged diversion of goods into domestic markets could violate customs, tax, and intellectual property laws.
The FBR has increased enforcement efforts across Pakistan’s tobacco sector following instructions to curb tax evasion and illegal trade practices. Investigations are ongoing.
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