ISLAMABAD - The uphill task for the new government is to synchronize efforts to counter the menace of smoking as with 24 million active tobacco users, Pakistan is among the world’s top tobacco-consuming countries, reveals a recent report prepared by Pakistan Institute of Development Economics (PIDE).
According to an estimate, cigarette prices are at the lowest level in Pakistan as compared to those in other countries of the region.
Similarly, another Islamabad-based think tank Capital Calling has also pressed on the need to tax cigarettes in accordance with the guidelines set by the WHO, that calls for holding cigarettes companies to account for the health and environment losses they make. The PIDE report, however, adds that tobacco usage is associated with many adverse health effects, but the tax revenue it generates cause tobacco tax policy inertia in Pakistan and other countries. “Despite evidence that higher tobacco taxation discourages tobacco consumption, Pakistan’s tax policies especially towards tobacco sector need to be further improved,” it says.
“One explanation could be that the policymakers, who consider the tobacco industry a major contributor to government coffers, are reluctant to raise taxes fearing the revenue loss,” it says.
However, when the government abolished the third tax tier in 2019, it effectively reduced the tobacco industry’s manoeuvring space to sell cheaper cigarettes.