Zero tolerance for tax evasion: FBR tightens noose around cigarette manufacturers

ISLAMABAD: In the current fiscal year, the Federal Board of Revenue (FBR) has taken large-scale actions against tax evasion in the cigarette industry, exposing tax evasion worth billions of rupees.

According to sources, a zero-tolerance policy against tax evasion was adopted on the strict instructions of Prime Minister Shehbaz Sharif, while, despite political pressure, an indiscriminate crackdown was carried out against cigarette factories owned by various influential and political families.

According to the details, 710 legal actions were taken against illegal cigarettes till March 2026 in the current fiscal year, during which untaxed raw materials, finished cigarettes, and machinery worth billions of rupees were seized.

According to sources, in November 2025, enforcement teams of the Regional Tax Office Peshawar raided the warehouse of Indus Tobacco Company in Mardan, where 200 cartons of illegal and tax evasion cigarettes were seized despite armed resistance.

Later, two owners were also detained in another operation against the company for illegally transferring machinery. According to sources, the owners of Indus Tobacco Company belong to the well-known political family of Mardan, the Hoti family.

In addition, a major operation was also carried out against Souvenir Tobacco Company in the same month. According to sources, the said company is owned by famous politician Senator Dilawar Khan, and the factory was sealed for its involvement in tax evasion.

The FBR had also registered an FIR against the directors of the said cigarette factory, Farid Khan, Raza Shah, Azam Khan, Adnan Khan, and Abbas Khan.

According to sources, one director, Azam Khan, is the brother of Senator Dilawar Khan, while the other director, Adnan Khan, is his son. Senator Dilawar Khan has also been criticized in the past for the controversy over the production of cigarette packets with the Senate monogram, while he is currently a member of the Senate Standing Committee on Finance.

Sources claim that in the recent meeting of the Standing Committee on Finance, he expressed his strong anger at the FBR officers for the action against his alleged cigarette factory. And used the strongest words.

In December 2025, tax authorities seized machinery for the production of tax-evading cigarettes while taking action against the Universal Tobacco Company in Mardan.

According to sources, raw materials worth several billion rupees have been seized in tax evasion cases against the Universal Tobacco Company in the past. The Universal Tobacco Company is said to be owned by a well-known political family of Mardan, while its owner, Haji Naseem-ur-Rehman, was a former member of the National Assembly.

According to sources, his nephew Faisal Saleem-ur-Rehman is currently a senator and also the chairman of the Senate Standing Committee on Interior, who has faced controversies in the past over his business interests and seeking help from the FIA.

According to sources, a major operation was also carried out against the Khyber Tobacco Company in December 2025, during which 2.75 million kilograms of tax-free tobacco were seized, while untaxed raw materials worth more than one billion rupees were also taken into custody.

Sources say that the Khyber Tobacco Company is a company owned by the Samsons Group, while the famous Malam Jabba scandal of the past was also related to the leasing of three hundred acres of land to the same group.

According to sources, after the previous crackdown in Khyber Pakhtunkhwa, several cigarette factories had shifted their units to Azad Kashmir.

But after the actions against the cigarette industry in Azad Kashmir for tax evasion, many factory owners have shifted cigarette manufacturing machinery to interior Sindh. Sources claim that at present, clandestine illegal cigarette manufacturing units are still active in various areas of interior Sindh.

According to sources, despite political pressure and efforts to exert influence through standing committees, the FBR has continued to take action against tax evasion in the cigarette industry.

Sources say that the relevant standing committees include several members who are directly related to cigarette factories, and the platforms of the standing committees are being used unconstitutionally to protect business interests.

According to sources, FBR officers are facing severe pressure and ridicule in the standing committees for confiscating raw materials worth billions of rupees and taking action against tax evasion.