ISLAMABAD: Health activists have urged the Pakistani government to levy more tax on tobacco products to generate extra revenue and save people’s health.
At an event organised by the Society for the Protection of the Rights of the Child (SPARC), health activists presented a simulation model on tobacco taxation, explaining how increased tobacco taxation could be a win-win situation for the Pakistani government and the people.
Campaign for Tobacco-free Kids (CTFK) country head Malik Imran said that taxation was a crucial revenue source for any government. Taxing non-essential items such as tobacco products was necessary to boost revenue and ensure fiscal imbalance.
He said that due to the government’s decision to increase Federal Excise Duty (FED) on cigarettes in February 2023, an additional Rs11.3 billion revenue was generated in the fiscal year 2022-23, an increase of 9.7% from the last year.
Furthermore, he said an additional 4.4 billion in VAT revenue was received in the fiscal year 2022-23, an increase of 11.5% from the previous year. “This additional 15.7 billion revenue makes up 0.201% of our GDP, significantly boosting a struggling economy like Pakistan,” he said.
Imran said that these self-explanatory figures reveal that increased taxation benefits the economy, but the tobacco industry misleads everyone by crying out the illicit trade excuse. Imran added that the blown-up figure of illicit trade diverts people from underreporting.
He said these companies underreport their production and then sell their non-reported products in the illicit market, causing billions of losses to the national exchequer.
Dr Ziauddin Islam, Former Technical Head of the Tobacco Control Cell at the Ministry of Health, said that tobacco is the largest silent killer in Pakistan, as above 170,000 people die yearly. This pandemic also causes an annual economic burden of 615 billion which is 1.6% of Pakistan’s GDP.
He explained that increased prices bring a decrease in production and consumption, which decreases the health cost burden.
According to the estimates, there has been a 31.7% decline in the declared production of cigarettes in the fiscal year 2022-23 compared to the previous year.
Learning from this example, which the World Health Organization also recommends, Pakistan should increase taxes regularly so that inflation and per capita income are accounted for, and Pakistanis remain protected from the harms of tobacco products.
SPARC Programme Manager Khalil Ahmed Dogar said that the tobacco industry is targeting children so that “replacement smokers” could be recruited. Around 1200 Pakistani children between 6-15 years old start smoking daily.
He said that, on average, Pakistani smokers spend 10% of their monthly income on cigarettes. Therefore increased prices remain the most effective tool in keeping these killer products away from the spending power of children and low-income groups.
Khalil added that all stakeholders must cast their differences aside and unite to protect our children and youth from the harms of tobacco. Increasing tobacco taxes is such a step that should be regularly implemented.
