LAHORE: Pakistan’s economy could face a substantial loss of estimated Rs700 billion from the tobacco sector if the government proceeds with dissolving the Pakistan Tobacco Board (PTB) and transfers its regulatory authority to the province of Khyber Pakhtunkhwa.
The tobacco industry is already reeling from the impact of illicit trade, which has cost the economy over Rs415 billion. The sector could also suffer an additional loss of over Rs300 billion in duties from the legal companies if regulatory control shifts from the federal government to the provincial level, sources said.
It may be added that Khyber Pakhtunkhwa remains the epicentre of Pakistan’s illicit cigarette production, much of it operating under political protection. Transferring regulatory autonomy to provinces would weaken national policy consistency and open the door to manipulation by local interest groups.
Moreover, tobacco remains a critical contributor to rural employment, national revenue, and export income. Timely and uniform policy action is essential to safeguard the interests of growers and maintain investor confidence in the sector.
“Devolving PTB would be a regulatory disaster,” said Osama Siddiqui, a macroeconomic analyst. “Without a centralized authority, the already thriving illicit trade will spiral further out of control, crushing legitimate businesses and slashing government revenue,” he added.
Siddiqui said that dismantling the PTB’s federal structure would serve only the interests of illegal manufacturers and risk destabilizing a sector that plays a vital role in Pakistan’s economy.
Copyright Business Recorder, 2025
