Effective taxation termed wayout to control smoking

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.

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