Seminar suggests high taxes can control tobacco consumption

ISLAMABAD   -   Highlighting the impact of increase on tobac­co taxation and its effect on health cost, economic and social factors, speakers at a seminar held here on Wednesday stressed that sig­nificant increase in Federal Excise Duty (FED) on tobacco products can help mitigate the pervasive health hazards associated with to­bacco usage in the country.

Addressing the participants, CEO Human Development Foundation (HDF), Mehboob-ul-Haq said that tobacco consumption remains a formidable challenge for Pakistan, imposing a grave toll on both pub­lic health and the economy. With 31.9 million adults, roughly 19.7 percent the adult population, cur­rently using tobacco, the nation faces a significant health crisis. 

He said that streamlining the excise structure and focusing on goods with significant negative externalities could enhance both public health outcomes and reve­nue generation. 

Programme Manager HDF, Za­hid Shafiq stated that the previ­ous hike in FED, observed after a three-year hiatus, yielded tangi­ble benefits. By 2022-23, the FED share in retail prices reached 48% and 68% for low and high-tier cig­arettes, respectively. However, this momentum slowed in 2023-24, underlining the urgent need for sustained efforts in tobacco taxa­tion to safeguard public health and fiscal prosperity.

Country Director CTFK, Ma­lik Imran, drew the attention that economically, the tax hike was poised to generate an additional revenue of Rs17 billion, compris­ing Rs15.4 billion in FED and Rs1.6 billion in GST, marking a 12.1% in­crease. Such revenue augmenta­tion was critical for funding essen­tial public services and healthcare initiatives. Additionally, gradual implementation of a uniform FED rate across all cigarette brands fos­ters fair competition and prevents market distortions, he said.

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