ISLAMABAD: The Federal Board of Revenue (FBR) has launched a major crackdown against tax evasion in the cigarette industry, sealing several cigarette factories reportedly linked to influential political families and exposing alleged multi-billion-rupee tax fraud.
According to official sources, the operation was carried out on the strict instructions of Prime Minister Shehbaz Sharif under a “zero tolerance policy” against tax evasion. Authorities claimed that despite strong political pressure, FBR took action against multiple cigarette manufacturing units and uncovered large-scale tax fraud worth billions of rupees.
Government sources stated that 710 operations were conducted against illegal and smuggled cigarettes during the current fiscal year up to March, marking a record enforcement drive.
In one major raid in November 2025, the Regional Tax Office Peshawar conducted a raid on a tobacco company’s warehouse in Mardan. Officials reportedly faced armed resistance but still managed to seize 200 cartons of untaxed cigarettes and seal the facility.
Authorities also detained two owners of the company for allegedly shifting machinery illegally. In December 2025, machinery worth millions of rupees and raw materials worth billions were also confiscated in earlier actions against the same factory.
Sources further revealed that following previous crackdowns in Khyber Pakhtunkhwa, several tax-evading companies allegedly shifted their units to Azad Kashmir to avoid scrutiny and taxation.
It was also reported that some manufacturers moved heavy cigarette-making machinery to interior Sindh, where illegal and untaxed cigarette production is allegedly continuing in secrecy at night before distribution across the country. The FBR has now intensified efforts to tighten its grip on these networks.
