A major illegal cigarette network operating under the cover of tax exemptions granted to Export Processing Zones (EPZs) has been uncovered, according to official sources.
Authorities allege that expired and near-expiry foreign cigarette brands were being illegally repackaged and distributed in the domestic market and exported to less developed countries.
According to details, enforcement teams of the Federal Board of Revenue (FBR) conducted a raid at Pioneer Tobacco Trading Company, located within the Export Processing Zone in Karachi. During the operation, officials seized approximately 4.5 million smuggled and expired foreign cigarette sticks.
The confiscated brands reportedly included Marlboro,Benson & Hedges, Camel, Nero Blue, Cleopatra and several other foreign cigarette brands. A large quantity of expired shisha flavours, cigarette filters, acetate tow and cigarette paper was also confiscated from the premises.
Sources familiar with the investigation stated that expired or near-expiry cigarette stock was allegedly procured from international black markets at heavily discounted prices and then transported to Pakistan under the tax-free framework available to Export Processing Zones.
After repackaging, the products were allegedly supplied to the local market and exported to certain less developed African countries by exploiting exemptions on customs duties and sales tax for the EPZs.
According to experts, shelf life of cigarettes ranges between three to six months. Beyond this period, tobacco loses moisture and flavour, undergoes chemical degradation, and may develop mould posing serious health risks to consumers.
Representatives of Pakistan Tobacco Company and Philip Morris International have confirmed that Pioneer Tobacco Trading Company had not been authorized to import, manufacture, repackage or export their brands. Company officials emphasized that any production or repackaging of their trademarks without consent constitutes a clear violation of the law.
Investigations further revealed that the business group allegedly involved in the operation owns multiple entities, including Marsons Group, Pioneer Tobacco, GB Global, Eastern Industries and Hub Tobacco Company Lasbela. Official pages of these all companies shows same management/ owners along with same model of business operations.
These companies are said to be engaged in trading of new and used cigarette and related machinery, manufacturing unregistered local brands, and illegally repackaging of foreign cigarette brands without authorization.
After raid on M/s Pioneer Tobacco, M/s GB Global approached the court and secured a stay order fearing raid or action against them also.
According to industry estimates, smuggled cigarettes accounted for nearly 11 percent of Pakistan’s total cigarette market in 2025, resulting in billions of rupees in annual revenue losses to the national exchequer. Analysts warn that the growing sale of non-duty-paid and illicit cigarettes is undermining both the legal tobacco industry and government revenues.
Sources further added that, on the directives of the Prime Minister, a nationwide crackdown against illegal activities in the tobacco sector is ongoing. Authorities have vowed to expand the scope of investigations and initiate strict legal proceedings against individuals and other entities involved in tax evasion and unlawful cigarette repackaging by misusing tax incentives granted to Export Processing Zones.
