Umeed-e-Sehar, a nonprofit focused on public health, has released a study titled *Tax Stamps and Illicit Cigarette Sales in Pakistan: Understanding Retailers’ Knowledge Gap*. This study highlights significant gaps in retailers’ understanding of tax stamps, pricing regulations, and legal packaging in Pakistan’s cigarette market, exacerbated by weak regulatory enforcement.

Surveying 2,000 retailers in major cities such as Karachi, Lahore, and Islamabad, the findings revealed that 97% of retailers had never received compliance guidance from FBR officials, and 86% were unaware of the penalties for selling illicit cigarettes. Only 27% could distinguish between tax-paid and illicit packs, while 73% did not understand the placement or purpose of tax stamps. Most retailers relied on price rather than tax stamps to assess the legality of their stock, with 59% estimating that a substantial portion of their inventory lacked tax stamps.

Despite the introduction of the TransAct App by the FBR to assist in tax stamp verification, 98% of retailers were unaware of it. Promotional tactics for cheaper, untaxed cigarettes influenced 43% of retailers, with many citing high demand as a factor driving the illicit trade.

The study recommends stricter regulatory oversight, increased inspections, and targeted awareness campaigns to address these challenges and curb illegal sales. Enhanced collaboration between the FBR and local law enforcement is crucial to ensure compliance and protect public health and government revenues.