ISLAMABAD - The government is expected to collect an additional revenue of at least Rs60 billion after increasing the federal excise duty (FED) on tobacco products, social activists said on Friday, while rejecting multinational tobacco industry’s claim of illicit cigarettes in the market.
According to independent studies the actual share of illicit cigarettes in the market is around 18 percent with a major share from multinational brands.
“Now as the track and trace system has been put in place, the possibility of illicit trade of cigarettes has almost died down,” said Malik Imran, Country Head Campaign for Tobacco Free Kids at a discussion held here on Monday.
He said multinational cigarette makers are deliberately spreading the propaganda in the market that volume of illicit trade is increasing after the rise in taxes on cigarettes, which is a blatant attempt at pressuring the government.
He said it is estimated that cigarette consumption has plummeted after the recent taxes on tobacco. He said due to the decline in consumption, health cost of cigarettes is expected to come down to one billion dollars from over three billion dollars annually.
Malik further pointed out that after increasing the taxes on cigarettes, the volume of expenditure on tobacco related deceases annually would also be reduced from Rs 620 billion to Rs 200 billion.
In his remarks, Sanaullah Ghumman, Secretary General of Panah, said the increase in the FED on cigarettes was in line with the recommendations of the World Health Organisation (WHO), therefore, the public should support the government’s move to discourage tobacco consumption.
He said the government should stand by its decision of increase in the FED as this would help collect additional revenue of Rs60 billion from taxes on the cigarettes. The average Pakistanis would spend around 10 percent of their total monthly income on cigarettes, he said, adding that higher taxes on tobacco products were the only solution to protect the youth from the menace.