FBR uncovers alleged EPZ-linked scheme to repackage smuggled cigarettes

Pakistan’s Federal Board of Revenue (FBR) has reportedly uncovered a major alleged irregularity in the tobacco sector, involving claims that smuggled and expired foreign-brand cigarettes were being repackaged and circulated in local markets.

According to the report, enforcement teams carried out a raid at a tobacco and trading firm operating inside the Export Processing Zone (EPZ) in Karachi, where authorities allegedly seized millions of cigarette sticks along with production inputs and other related materials.

Sources cited in the report allege that near-expiry or expired cigarette stock is procured at very low prices abroad, moved into Pakistan through illicit channels, and then relabeled to conceal origin and manufacturing details before redistribution.

The report also highlights concerns that EPZ tax and duty exemptions—meant to encourage exports and investment—may have been exploited to import cigarette stock, repackage it within EPZ premises, and divert it into domestic supply chains while bypassing applicable duties and sales tax.

The article notes that brand owners cited in the report said such activity would be unauthorized and illegal. It further emphasizes potential public-health risks linked to deteriorated tobacco products, alongside fiscal losses due to untaxed sales.

The report adds that FBR has intensified enforcement in the tobacco sector and that the controversy has renewed scrutiny of oversight and compliance mechanisms within EPZs.