In order to exert pressure on the decision-makers in the upcoming budget (2023–24), the tobacco industry is wilfully releasing false information about the fall in the reported production of cigarettes.
Additionally, pro-health advocates encouraged the government to be on guard against the tobacco industry’s deceptive practises, which result in significant yearly losses for the national exchequer.
Health activists displayed statistics on cigarettes made in Pakistan by the tobacco industry during the event hosted by SPARC and SPDC to emphasise the fact that, in the majority of situations, the reported production in Pakistan is lower than the actual output.
4,006 million sticks were produced in February 2023, while 2,665 million sticks were produced in March 2023, according to the declared production. These are the strategies the industry uses to sway legislators, claim health campaigners. In other words, if this reduction is the result of a higher tax rate, why did production fall from 4,510 million sticks in June 2022 to only 1,021 million sticks in July 2022 when the tax was not raised?
The price of cigarettes has gone up as well, according to Muhammad Sabir, the principal economist of SPDC. The cost of a luxury brand increased from Rs. 179 to Rs. 483, while the cost of the most popular economy brand increased from Rs. 80 to Rs. 211 per pack.
Overall price increases were 164% and 1704%, respectively, in percentage terms.
The producers’ prices—or net-of-tax prices—for cigarettes have, however, also continued to rise. For example, the producers’ price of the economy brand climbed by 121 percent, which is significantly more than the current inflation rate. Economy brand taxes (FED and GST) increased by a total of Rs. 89 per pack.
Instead, there was a 131 rupee increase in the consumer price. The excise tax share in retail pricing has decreased from the commonly acknowledged standard of 70 percent to 51.6 percent as a result of over-shifting.
Campaign for Tobacco-Free Kids’ (CTFK) Country Head Malik Imran claimed that the tobacco business has consistently attempted to thwart government attempts to reduce cigarette dangers by exploiting the illicit drug
Although the tobacco industry exaggerates it, illicit trading does exist. To avoid paying taxes, the tobacco business actually engages in underreporting, hiding its actual levels of production. Manufacturers of cigarettes also shift the cost of taxes on customers to boost their bottom line.
There are 465 tobacco-related deaths and 1,200 new addictions among children every day, according to Khalil Ahmed Dogar, Programme Manager for SPARC. The government’s decision to boost tobacco pricing is a much-needed and laudable move. Tobacco control initiatives need for decisive actions.
The economy has already benefited from this choice, and it will continue to do so while increasing income and reducing the pressure on healthcare systems. The government must, however, maintain its will and avoid falling for the tobacco industry’s deceit in order to reap this dual gain.
