Call for tobacco tax hike to safeguard public health

Presenting alarming data on the use of tobacco and its adverse impact on the country’s economy and healthcare costs, health activists in Pakistan are demanding an urgent rise in tobacco taxes to safeguard the rights and health of children and the general public.

Malik Imran Ahmed, Country Head of Campaign for Tobacco-Free Kids (CTFK), sharing alarming statistics on tobacco use in Pakistan, says that approximately 31.6 million adults, constituting about 19.9pc of the adult population, are currently using 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 1.4pc of its GDP every year, he adds.

Mr Imran also pointed out the promising results of recent Federal Excise Duty (FED) reforms on tobacco, citing revenue collections exceeding Rs122 billion from July 2023 to January 2024, with projections for the full year surpassing Rs200 billion.

Furthermore, he says, these reforms are expected to generate an additional Rs60 billion in General Sales Tax (GST) from cigarettes for the fiscal year 2023-24, with an estimated combined impact of Rs88 billion, indicating a remarkable relative growth of nearly 49pc compared to the previous year.

He stresses the importance of these reforms in promoting public health by reducing tobacco consumption and potentially recovering 17.8pc of the total healthcare costs associated with smoking in Pakistan. However, he underscores the need for further action to maintain health cost recovery, recommending a 37pc increase in the FED rate for the upcoming year.

This tax proposal, according to Imran, offers a  'win-win' scenario, benefiting both 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, emphasizing the devastating impact of tobacco use on families, communities, and the economy.

He refuted misconceptions about tax increases promoting illicit trade, highlighting manipulative tactics employed by tobacco firms to influence tax policies and evade taxes.