Health Activists Advocate for Increased Tobacco Taxation to Boost National Revenue and Protect Public Health

Tcbacco Tax

In an event organized by the Society for the Protection of the Rights of the Child (SPARC), health activists emphasized the importance of the government’s decision to increase tobacco taxation as a means to generate more revenue for the national exchequer. They presented a Simulation Model on Tobacco Taxation, highlighting the positive impact of higher tobacco taxes on both the government and the people of Pakistan.

Malik Imran, Country Head of the Campaign for Tobacco-Free Kids (CTFK), stressed that taxation plays a crucial role in government revenue generation. He advocated for higher taxes on non-essential items such as tobacco to ensure fiscal stability and prevent the national exchequer from suffering. Imran highlighted the government’s decision to increase the Federal Excise Duty (FED) on cigarettes in February 2023, which resulted in an additional 11.3 billion FED revenue in the fiscal year 2022-23—a 9.7% increase from the previous year. Additionally, there was an extra 4.4 billion VAT revenue, representing an 11.5% increase from the previous year. This additional revenue of 15.7 billion accounts for 0.201% of Pakistan’s GDP, providing a significant boost to the struggling economy.

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Imran argued that these figures clearly demonstrate the economic benefits of increased taxation. He criticized the tobacco industry for misleading the public by exaggerating the issue of illicit trade. Imran explained that these companies under-report their production and sell their unreported products in the illicit market, causing significant losses to the national exchequer.

Dr. Ziauddin Islam, Former Technical Head of the Tobacco Control Cell at the Ministry of Health, emphasized that tobacco is the largest silent killer in Pakistan, leading to over 170,000 deaths annually. This epidemic also imposes an economic burden of 615 billion, equivalent to 1.6% of Pakistan’s GDP. Dr. Islam explained that higher tobacco prices result in decreased production and consumption, ultimately reducing the burden of healthcare costs. According to estimates, there has been a 31.7% decline in declared cigarette production in the fiscal year 2022-23 compared to the previous year. Learning from this example, and in line with World Health Organization recommendations, Pakistan should increase taxes at regular intervals to account for inflation and per capita income, protecting its citizens from the harms of tobacco products.

Khalil Ahmed Dogar, Program Manager at SPARC, drew attention to the tobacco industry’s targeting of children in an attempt to recruit “replacement smokers.” Shockingly, around 1,200 Pakistani children between the ages of 6 and 15 start smoking every day. Dogar highlighted that, on average, Pakistani smokers spend 10% of their monthly income on cigarettes. Thus, increased prices remain the most effective tool to curb the purchasing power of children and low-income groups, keeping these harmful products out of their reach.

Dogar urged all stakeholders to set aside their differences and unite in protecting children and youth from the harms of tobacco. Implementing regular increases in tobacco taxes is a critical step toward achieving this goal.

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