The Federal Board of Revenue (FBR), through the Regional Tax Office (RTO) Peshawar, has seized a large quantity of non-duty-paid unmanufactured tobacco in District Mardan, averting a potential revenue loss of around Rs19 billion to the national exchequer.
According to an official statement, the enforcement action was carried out in line with directives issued by the prime minister and under FBR’s ongoing enforcement plan. The operation resulted in the recovery of approximately 2.75 million kilograms of unmanufactured tobacco from the godowns of M/s Khyber Tobacco Company.
The seized tobacco, a primary raw material used in cigarette manufacturing, was found to be non-duty paid. Authorities estimate that the evaded Federal Excise Duty on the recovered quantity alone amounts to around Rs1.1 billion. M/s Khyber Tobacco Company is a known manufacturer of cigarette brands, including Kissan and Gold Street Classic.
Following the completion of all codal formalities and receipt of necessary approvals, the company’s godowns were sealed on December 12, 2025, by officials of RTO Peshawar. The operation was conducted by Assistant Commissioner Inland Revenue Shehroz Rashid Ahmad Khan under the supervision of the Chief Commissioner Inland Revenue, RTO Peshawar.
Further proceedings are underway under Sections 21, 22, 19(3), 19(10), and 27 of the Federal Excise Act, 2005, including actions related to the sealing and confiscation of machinery allegedly used in the production of non-duty-paid tobacco and cigarettes.
Preliminary assessments indicate that had the seized tobacco been converted into cigarettes, it could have led to tax evasion of approximately Rs19 billion, resulting in a substantial loss to public revenue. The recovery has therefore disrupted a major potential source of illicit cigarette production and prevented significant revenue leakage.
The FBR noted that Pakistan continues to face serious challenges from illicit trade in the tobacco sector, which undermines the economy and causes heavy losses to the exchequer. The unchecked movement and storage of non-duty-paid unmanufactured tobacco pose a grave risk, as they directly facilitate large-scale evasion of Federal Excise Duty and other taxes.
To address these risks, the prime minister has issued clear directives to decisively curb illegal practices in the tobacco and cigarette sector and ensure strict enforcement of tax laws across the entire supply chain, including raw materials. In line with these directions, the FBR has adopted a comprehensive, intelligence-based enforcement strategy to eliminate non-duty-paid cigarette production and dismantle illegal manufacturing and supply networks.
