Increasing illicit trade continued to affect Pakistan's cigarette industry during the past year, now accounting for an estimated twenty per cent of the total market. On the leaf production side, the Asian country saw a higher than expected crop. According to research by independent international research agency AC Nielsen, some 75 billion cigarette sticks were produced in Pakistan in 2005. Of this figure, the legitimate sector produced only 59 billion units, while the remaining 16 billion sticks weremanufactured by illegal manufacturers. In addition, the report said, the smuggling networks which operate largely from Pakistan's north-western borders, i.e. from Afghanistan, managed to bring in about 1.5 billion units into the country. Large-scale tax evasion and counterfeit production of cigarettes reportedly causes an annual loss of more than six billion rupees to the country's treasury. After petroleum, tobacco is the second-highest single contributor of revenue to the government.
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