London : In an engagement during his official visit to the United Kingdom, Finance Minister Muhammad Aurangzeb held a meeting with senior representatives of British American Tobacco (BAT) to discuss long-standing concerns around illicit trade, counterfeit tobacco products, and the implications of Pakistan’s current excise duty regime.
BAT shared its perspective on the growing challenge of smuggling and counterfeiting in Pakistan’s tobacco sector. The company emphasized that the high and uneven excise duty structure has unintentionally incentivized illicit operators, eroding the formal market and depriving the government of significant tax revenues.
BAT representatives proposed that a rationalized and predictable duty scheme would help curb illicit trade, draw consumers back to legal channels, and generate higher tax revenues for the government over time. They stressed that such a framework would mainstream the sector, support legitimate businesses, and enhance regulatory oversight.
In response, Finance Minister Aurangzeb acknowledged the issue as a legitimate concern and assured BAT that the matter would be carefully reviewed during the upcoming federal budget process. He highlighted the government’s broader commitment to revenue mobilization, formalization of sectors, and effective enforcement against illicit trade. The Minister reiterated that reforms in the taxation structure are being guided by the principles of fairness, efficiency, and economic inclusion.
The meeting concluded with a mutual understanding on the importance of striking a balance between public health objectives and market formalization, and a shared interest in promoting a stable and rules-based trade environment in Pakistan.
Sohail Majeed is a Special Correspondent at The Diplomatic Insight. He has twelve plus years of experience in journalism & reporting. He covers International Affairs, Diplomacy, UN, Sports, Climate Change, Economy, Technology, and Health.
