The Federal Board of Revenue (FBR) has intensified its crackdown on illegal tobacco production in Khyber Pakhtunkhwa by raiding a PTI-backed cigarette manufacturing facility in Mardan. In early December, a team from the Regional Tax Office (RTO) Peshawar—acting under directives from the Chief Commissioner—raided a secret plant operated by Universal Tobacco Company (Pvt.) Ltd. The factory was allegedly involved in covert production of tobacco for illegal cigarette manufacturing.
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During the operation, authorities seized high-capacity machinery capable of producing 6,000 to 7,000 kilograms of tobacco per day, generating an estimated Rs. 45 million in daily revenue. Universal Tobacco Company is known for manufacturing brands such as Café and Ranger. RTO Peshawar conducted the entire operation independently and has initiated legal proceedings against the company, underscoring the FBR’s resolve to safeguard national revenue and enforce tax compliance.
According to FBR sources, illegal cigarette manufacturing in Khyber Pakhtunkhwa has flourished for years under alleged political patronage. Multiple factories and tobacco traders in the region are reportedly linked to Pakistan Tehreek-e-Insaf (PTI) leadership, which insiders claim has provided protection to these operations. Officials say the Masood Welfare Trust—also known as Masood Sons—is connected to Universal Tobacco Company, Saleem Cigarette Industries, Millat Tobacco, and Markhor Tobacco. Saad Rahman, a close relative of Senator Faisal Saleem Rahman and Haji Naseem Rahman, is believed to be a key player in this network.
These political connections allegedly allowed the companies to run illegal facilities for years without interference. Several other manufacturers with reported PTI ties are accused of similar operations. To evade tax enforcement, many factories were reportedly set up in Malakand and other regions where customs oversight is traditionally weak. Notable names linked to the trade include MNA and former provincial minister Shehram Tarakai and his family, who produce Red & White and Cash brands. These cigarettes were allegedly smuggled into Afghanistan and Punjab via the Indus River route. Former MNA and provincial minister Atif Khan is also reported to be associated with the network. Meanwhile, Senator Dilawar Khan from Mardan is said to own multiple factories, and Senator Faisal Naseem along with his father Haji Naseem-ur-Rahman are also reported to be involved. Most of these operations are clustered in Swabi, Mardan, Sakhakot, Dargai, and Nowshera.
Officials note that cigarette production costs are low, while market prices remain high due to heavy taxation. When manufacturers evade taxes, profit margins rise sharply. FBR insiders say the illegal trade expanded significantly during PTI’s decade-long rule in Khyber Pakhtunkhwa. The increase in cigarette taxes in the 2024–25 federal budget further widened the black-market profit margins, strengthening these illicit networks. Authorities also allege that billions in illegal income have been used to fund online propaganda, including paid teams tasked with misleading the public and targeting key state institutions.
Taking notice of the issue, the Prime Minister has ordered the deployment of 120 Pakistan Rangers personnel to Green Leaf Threshing (GLT) units across the country. Special monitors have also been appointed under the Sales Tax Act 1990 and the Federal Excise Act 2005 to ensure lawful production.
This is not the first action against Universal Tobacco Company.
• 2021: Initial inquiry launched
• 2022: Three unregistered factories seized in Mardan and Swabi; FBR issued notices
• 2024: Investigative report exposed political patronage and illegal activities
• Dec 5, 2025: RTO Peshawar raided a hidden plant, seized machinery, and began legal proceedings
The FBR has reaffirmed its commitment to pursuing all illegal cigarette manufacturers and ensuring full compliance with national tax laws.