ISLAMABAD: The Federal Board of Revenue (FBR) has seized approximately 2.75 million kilograms of non-duty-paid un-manufactured tobacco in a major enforcement operation in District Mardan, foiling an estimated tax evasion of up to Rs19 billion, officials said on Saturday.
The seizure was carried out by the Regional Tax Office (RTO) Peshawar at the godowns of a tobacco company.
According to the FBR, the seized tobacco is the primary raw material for cigarette manufacturing and was found to be non-duty paid, with an estimated evaded Federal Excise Duty of about Rs1.1 billion.
The operation was conducted in line with clear directives issued by the Prime Minister to decisively curb illicit practices in the tobacco and cigarette sector and to ensure strict enforcement of tax laws across the entire supply chain, including raw materials. Following completion of all codal formalities and requisite approvals, the godowns were sealed on December 12, 2025.
The enforcement action was executed by Assistant Commissioner Inland Revenue Shehroz Rashid Ahmad Khan under the supervision of the Chief Commissioner Inland Revenue, RTO Peshawar. Further proceedings under relevant provisions of the Federal Excise Act, 2005, relating to the sealing and confiscation of machinery used in the production of non-duty-paid tobacco and cigarettes, are currently underway.
The FBR said the seizure prevented a major source of illicit cigarette production and significant revenue leakage. A preliminary assessment indicated that, had the tobacco been converted into cigarettes, it could have caused losses of up to Rs19 billion to the national exchequer.
Officials noted that Pakistan continues to face a serious challenge from illicit trade and unlawful activities in the tobacco sector, which undermine the national economy and result in substantial losses of public revenue. To counter this, the FBR has rolled out a comprehensive, multi-layered enforcement strategy, supported by law-enforcement agencies and relevant stakeholders, aimed at disrupting illegal manufacturing and supply networks.
It was also disclosed that only a week earlier, RTO Peshawar seized undeclared cigarette manufacturing machinery in a separate operation. The owners of both entities are reportedly related and wield political influence in the area.
Despite what it described as immense and undue pressure, the FBR said its officers carried out the actions strictly in accordance with the law, underscoring the authority’s commitment to tax compliance, protection of legitimate industry, and safeguarding of public revenue, regardless of the status or influence of those involved.
