ISLAMABAD-The Sustainable Development Policy Institute (SDPI), the Islamabad-based think-tank, has revealed that enormous increase of cigarettes consumption and revenue loss is linked to the lowest level of excise duty imposed on cigarettes in Pakistan.
The SDPI in its research study “Regional Tobacco regime and its implications for Health” said that main factor leading towards the failure of tax regime is that the success is gauged through revenue generation instead of achieving health goals.
It also said that Pakistan with the lowest prices of cigarettes in the world was meant to provide tax relaxation to tobacco industry as happened in the year 2017, wherein a third tier had been introduced by FBR with 50 percent decrease in the excise duty.
This situation has led an increase in health issues vis-à-vis revenue generation is not sufficient enough to cater the needs of the prevalent health challenges being faced by Pakistan, it said.
It mentioned that increase in tobacco taxation is the need of the hour for controlling the consumption of cigarettes and for increasing the revenue of the national exchequer.
According to the WHO, more than 1.3 billion people consume tobacco products daily, with around 8 million deaths annually across the globe.
The WHO asserts that high taxation and increased prices always resulted in the decreased use of tobacco products.
To discourage the smoking and boost revenue, the study suggests the government to introduce exhaustive tax reforms as a key to success, which are implemented strictly by the FBR.
In addition to excise duty, Pakistan should also levy other taxes like sin tax and value added tax to comply with the WHO rules which suggest taxation of about 70 percent to control open availability of tobacco products.