Health hazards, cigarettes revenue losses on rise: SDPI

ISLAMABAD  -  Cigarette consumption is con­tinuous increasing in develop­ing countries especially Pakistan which has also incurred billions in losses, both in terms of revenue and increased health costs.

Pakistan is one of the top tobac­co-consuming countries standing at the 7th position globally and first in the WHO Eastern Medi­terranean Region (EMR) in terms of the number of tobacco product users. 

According to estimates, more than 60 billion sticks of cigarettes are produced in the country every year, however when it comes to revenue the Federal Board of Rev­enue (FBR) data shows a nega­tive picture during the last seven years. 

The total loss, estimated by a number of research studies in­cluding one by the Sustainable De­velopment Policy Institute (SDPI), has been estimated at Rs567 bil­lion during the last seven years. 

The WHO emphasizes to en­sure tobacco tax policies for ef­fective development, implemen­tation, and enforcement of public health initiatives. However, it did not happen in Pakistan. 

The study also highlighted how high and middle-income countries have successfully imposed high taxes on cigarette products to de­crease consumption and increase government revenues, but the fact remains that Pakistan still lacks a clear strategy on using cigarette taxation and prices as a public health tool.

Pakistan has signed the Frame­work Convention for Tobacco Con­trol (FCTC), the multilateral treaty initiated by WHO in 2004 to curb smoking. 

World Bank has also revealed, in a report titled ‘Pakistan: Over­view of Tobacco Use, Tobacco Con­trol Legislation, and Taxation,’ that the decline in government reve­nue in the 2016-2017 fiscal year was carefully planned by the pow­erful cigarette industry. 

According to details, the ciga­rette industry convinced the gov­ernment to introduce third-tier (for taxation) in order to curb il­licit trade.

When it comes to burden on the health sector, the Pakistan Insti­tute of Development Economics (PIDE) provides insight into the overall costs linked to smoking-re­lated diseases and deaths in Paki­stan for the year 2019. 

The analysis points to an ad­ditional financial burden of Rs615.07 billion ($3.85 billion), with indirect costs such as mor­bidity and mortality constituting a significant 70% of the total ex­penses. 

This highlights the pressing need to reassess the industry’s sway on national policies, empha­sising the importance of balanc­ing public health and economic stability.

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