Illegal trade is a major threat to Pakistan’s economy and there is a dire need to address this issue of under-declaration, resulting in tax evasion in various industries including cigarettes, packaged spices, sugar, batteries, electronic products, motorcycles, bicycles, cement and consumer goods industries.

It estimated that in the fiscal year 2014, 59% of the total demand for products of over half a dozen sectors of the formal economy, including petroleum, tea, mobile phones and auto parts industry, is was met through illicit trade of smuggled goods.

It was reported, from 2014 to 2018, the volume of goods smuggled into Pakistan increased nearly threefold. In terms of value as a share of Pakistan’s gross domestic product (GDP), smuggling went up from 3.88% to 11.25% in that period.