FBR cracks down on illegal cigarettes, shuts two factories in KP

The Federal Board of Revenue (FBR) has launched a major nationwide operation targeting the production and distribution of non-duty-paid cigarettes, resulting in the closure of two factories in Khyber Pakhtunkhwa within the past week. Authorities say the move aims to curb revenue losses estimated at Rs250–300 billion annually due to the illicit tobacco trade.

Operation under strict government directive

The multi-layered enforcement plan, devised following instructions from the prime minister, focuses on tightening oversight of manufacturing lines, disrupting illegal supply networks, and protecting national revenue.

As part of the crackdown, the FBR has deployed more than 200 monitors across production facilities nationwide and assigned around 120 Pakistan Rangers personnel to secure Green Leaf Threshing units. Officials say this is intended to prevent unauthorised production and strengthen on-site surveillance.

Raids uncover large-scale tax evasion

The first major action under the plan occurred on November 3 when the Directorate of Intelligence & Investigation-IR Peshawar raided an undeclared godown in Mardan.

Officers recovered 200 cartons of non-duty-paid and unregistered cigarettes, including Business Class, Red, and Crown brands, all registered under Indus Tobacco Company (Pvt) Ltd. After filing a formal contravention report on November 21, the Regional Tax Office Peshawar sealed the company’s manufacturing machinery on November 29.

Deputy Commissioner Arsalan Ali, leading the enforcement team under the supervision of the Chief Commissioner, faced armed resistance reportedly involving company director Bilal Khan, a member of a politically influential Mardan family. Despite the confrontation, the sealing was successfully completed, and further proceedings are ongoing under the Federal Excise Act, 2005.

Second factory also shut down

On the same day, the Souvenir Tobacco Company was targeted in a similar operation. Authorities found evidence of illegal cigarette production and distribution, leading to the sealing of its machinery. These two actions mark the first major steps in a wider effort to tackle large-scale tax evasion in the tobacco sector.

FBR officials have indicated that monitoring and enforcement across the industry will continue, signalling further actions against illegal manufacturers and distributors. The crackdown is seen as part of a broader push to restore compliance and reinforce revenue collection in Pakistan’s tobacco sector.