Pakistan’s tobacco industry has contributed more than Rs16.79 trillion to the national treasury over the past 10 fiscal years, according to official government documents, making it one of the country’s highest tax-paying sectors.
The records show that between FY2015-16 and FY2025-26, the government generated over Rs16.79 trillion through taxes and duties imposed on tobacco products.
Out of the total revenue, more than Rs3.37 trillion was collected through sales tax, while the remaining amount came from Federal Excise Duty (FED), income tax and other taxes on tobacco manufacturing, distribution and sales.
Over the past decade, the government has repeatedly increased taxes on cigarettes and other tobacco products to boost revenue while discouraging tobacco consumption through higher prices.
Officials say stronger tax enforcement, improved monitoring systems and enhanced compliance have helped maintain steady revenue from the tobacco sector despite stricter regulations and higher tax rates.
Economists believe the tobacco sector presents a policy challenge, as authorities seek to balance revenue generation with public health objectives while tackling issues such as illicit cigarette trade and tax evasion.
The government has also introduced various measures in recent years to improve tax compliance and strengthen action against illegal tobacco products to safeguard both public health and national revenue.
