ISLAMABAD — Health advocates are calling for an immediate increase in tobacco taxes in Pakistan to protect the health and rights of children and the general public. The Society for the Protection of the Rights of the Child (SPARC) issued a press release stating that this call comes at a time when the country is facing a severe public health crisis.
Malik Imran Ahmed, the Country’s Head Campaigner for Tobacco-Free Kids (CTFK), shared that recent statistics reveal alarming figures regarding tobacco use in Pakistan. Currently, approximately 19.9% of the adult population, which is around 31.6 million adults, use tobacco. Tobacco-related illnesses claim more than 160,000 lives annually, imposing a significant burden on the healthcare system and costing the economy at least 1.4% of its GDP every year.
Imran further explained that recent Federal Excise Duty (FED) reforms on tobacco have generated promising revenue results. From July 2023 to January 2024, collections have already surpassed PKR PKR 122 billion, with projections for the full year exceeding PKR PKR 200 billion, marking a substantial increase compared to previous fiscal years.
In addition, these reforms are expected to generate an additional PKR 60 billion in General Sales Tax (GST) from cigarettes in the fiscal year 2023-24. The combined impact of FED and GST is estimated to be around PKR 88 billion, indicating a remarkable relative growth of nearly 49% compared to the previous year.
Imran added that these reforms have a crucial role in promoting public health by reducing tobacco consumption and potentially recovering 17.8% of the total healthcare costs associated with smoking in Pakistan. However, maintaining the current rate could decrease health cost recovery, highlighting the urgent need for further action.
To achieve similar levels of health cost recovery observed in 2023-24, a 37% increase in the FED rate for the upcoming year is recommended. This tax proposal presents a clear ‘win-win’ scenario, benefiting the government and the people of Pakistan by enhancing revenue and safeguarding public health.
Dr. Khalil Ahmad Dogar, Program Manager at SPARC, echoed these sentiments, stating, “The devastating impact of tobacco use extends far beyond individual health, affecting families, communities, and the economy at large. We cannot overlook the urgency of implementing effective measures to address this crisis.”
Dr. Khalil said that research evidence strongly refutes the argument that a tax increase may promote illicit trade, contrary to misconceptions. It highlights the manipulative tactics employed by tobacco firms to influence tax policies and evade taxes. Moreover, the recently initiated track-and-trace system is expected to combat counterfeiting, curb illicit trade further, and ensure effective regulation of the tobacco industry.
Dr. Khalil emphasized that we must take decisive action to curb tobacco use in Pakistan to safeguard the health and well-being of our citizens, particularly our children, acknowledging the urgency of the situation.
