As Pakistan continues to navigate persistent fiscal challenges, the recent budget documents for FY 2025-26, presented this month, contain an astonishing anomaly that demands immediate attention. It concerns the Federal Excise Duty (FED) on cigarettes – a seemingly mundane line item that, upon closer inspection, reveals a perplexing discrepancy between official production figures and actual tax collection, hinting at either profound systemic failure or, more troublingly, a strategic manipulation of numbers.

Let’s dissect the figures that raise eyebrows for any economist, or indeed, any discerning citizen. For the fiscal year 2023-24, the FBR successfully collected PKR 237.1 billion from cigarette FED. Building on this, the FBR initially set an ambitious target of PKR 323.7 billion for the current fiscal year, FY 2024-25, which concludes on June 30th.

This optimism seemed plausible, especially considering data from the Pakistan Bureau of Statistics (PBS), which reported a robust 13.1 percent growth in cigarette production during July-March of FY 2024-25 compared to the previous year.

However, the revised estimates in the FY 2025–26 budget documents present a stark and perplexing contrast. The FBR now anticipates collecting a mere PKR 147 billion for the entire FY 2024-25. This isn’t just a shortfall; it’s a colossal 54.6% reduction from their own initial target, and a staggering 38% less than what was collected last........

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