ISLAMABAD – The Aurat Foundation is advocating for a 26% increase in the Federal Excise Duty (FED) on cigarettes instead of imposing Goods and Services Tax (GST) on petroleum products. During an iftar dinner for the newly elected members of the National Assembly (MNAs), Naeem Ahmed Mirza, Executive Director of Aurat Foundation, urged the federal government to raise tobacco tax in the 2024-25 budget to save lives. Currently,
Pakistan operates with a two-tier FED structure for cigarettes, categorized by price tiers. By reducing tobacco consumption through higher taxes, the economic burden associated with tobacco-related diseases can be lowered, potentially freeing up resources that could be allocated towards poverty reduction.
The Aurat Foundation has recently joined the campaign for tobacco-free kids to strengthen monitoring and accountability mechanisms, improve public health, and enhance the overall well-being of the Pakistani youth. Anees Ahmed, Country Advisor of Campaign for Tobacco-Free Kids, informed MNAs that following a substantial increase in 2022-23, the FED share in retail prices reached 48% and 68% for low and high tiers, respectively. However, due to the absence of rate adjustments, the levelling off of the FED share in 2023-24 could adversely affect revenue and public health efforts.
The proposal suggests that a 26.6% FED increase in 2024 could recoup 19.8% of the costs, narrowing the gap between health burdens and tax revenues. A 26.6% FED hike could potentially lead to 517,000 fewer smokers, a 12.1% increase in tax revenue, and a 19.8% recovery of health costs. Beyond 2023-24, the government should integrate cost recovery into tobacco tax policies through automatic adjustments, implement a uniform FED rate across all cigarette brands, and prescribe tax increases for the next three years.
Ms. Mumtaz Mughal, Director of Programs and an anti-tobacco campaigner at Aurat Foundation, stated that in Pakistan, 31.9 million adults aged 15 years and above, approximately 19.7% of the adult population, are current tobacco users. Tobacco use leads to over 337,500 deaths annually in Pakistan, amounting to 1.4% of the nation’s GDP each year, she concluded, quoting a World Bank Report.
At the iftar dinner, some women parliamentarians from all political parties participated and voiced their support for the anti-tobacco campaign. Ms. Zeb Jaffar, MNA, offered all-out support for the child’s rights in and out of the parliament. Ms. Sahar Kamran, MNA, stated that she has been fighting for children’s rights ever since she was a member of the Senate of Pakistan and will be pleased to continue her mission of child rights legislation in the parliament.
Syeda Shehla Raza MNA, former provincial Minister of Women of Sindh, supported the anti-tobacco campaign. MNAs Ms Naima Kanwal, Ms Shazia Sobia, Ms Naeema Kishwar Khan, Minority MNA from Thar, Ms Neelam Sahiba, Ms Mehreen Razzaq Bhutto, Ms Mahjabeen Abbasi also spoke and expressed their support for the anti-tobacco campaign and child-friendly legislation in the parliament.
Syed Safdar Raza, an anti-tobacco campaigner at the Aurat Foundation, said that the suggested tax hike promises a clear ‘win-win’ situation for health and revenue for the government and the people of Pakistan. Concerns about illicit trade have been countered by research showing that tobacco companies manipulate reported production to influence tax policies and evade taxes. Mr. Raza stressed that the government should adopt innovative ways of tax collection instead of burdening the poor. Civil society will support the government in debunking any myths the tobacco industry propagates.
