The government was urged by health advocates and civil society groups to raise cigarette taxes even further in the upcoming budget (2023–2024).
They continued by saying that taxes, which are a major source of income for any government, reduce both the budget deficit and the cost of treating diseases. Taxing non-essential goods like tobacco does both.
According to a statement by Sanaullah Ghumman from PANAH, the NGO has long argued for social restrictions on smoking because it contributes to sickness. According to his assertion, the World Health Organisation (WHO) has advised the government to regularly levy levies on cigarettes.
According to Malik Imran, Country Head of the Campaign for Tobacco-Free Kids (CTFK), the government’s decision to raise the Federal Excise Duty (FED) on cigarettes in February 2023 resulted in an increase of Rs. 11.3 billion (or 9.7 percent) in FED revenue for the fiscal year 2022–2023 of Rs.
Additionally, VAT revenue increased by 11.5 percent in the fiscal year 2022–23 to a total of Rs. 4.4 billion, a 4.4 percent rise over the prior year. This increased revenue of Rs. 15.7 billion is 0.201 percent of the country’s GDP, which is a big boost for Pakistan’s beleaguered economy, according to him.
Imran stated that these self-evident facts demonstrate that higher taxes are good for the economy, but the tobacco business misleads everyone by invoking the excuse of illegal commerce. Imran stated that the exaggerated illicit trade statistic is employed to distract people from underreporting.
These businesses underreport their production, selling their unreported goods on the black market and costing the government’s coffers billions of dollars.
The most silent killer in Pakistan, according to Dr. Ziauddin Islam, a retired government official, is tobacco usage, which is responsible for more than 170,000 deaths annually. Additionally, this pandemic costs Pakistan’s economy 615 billion year, or 1.6% of its GDP. He explained that decreased output and consumption are brought on by price increases.
Estimates show a 31.7 percent decrease in announced cigarette production for the fiscal year 2022–2023 compared to the prior year. Taking this as a model, Pakistan should raise taxes on a regular basis to account for inflation and per capita income while continuing to protect its citizens from the dangers of tobacco use, as advised by the World Health Organisation.
