High taxes on tobacco products can control smoking: Report

ISLAMABAD   -   An international lender has revealed that following a significant increase in prices or taxes on tobacco products, the consumption of cigarettes in Pakistan has witnessed a notable decline of 20-25 percent, revealed a Technical Assistance Report of the commission – Pakistan Tax Policy Diagnostic and Reform Options.

The report released recently, explains that the global lender, International Monetary Fund (IMF), advocated imposition of uniform excise rates on both local and foreign cigarette manufacturers.

The proposal aims to address health concerns associated with smoking while ensuring fair taxation practices. It suggests subjecting e-cigarettes to similar taxation as traditional tobacco products, citing comparable health impacts.

Capital Calling, an Islamabad-based think tank, has also endorsed the global lender’s recommendation, aligning it with the guidelines set forth by the World Health Organisation (WHO). Health activists have rallied behind the IMF’s stance, emphasising the need for restructuring tobacco taxation in Pakistan.

Health activists, at a recent event organized by the Society for the Protection of the Rights of the Child (SPARC), also urged the government to transition to a Single Tier Tobacco Taxation System, thereby eliminating the existing dual-tier system.

They said that by implementing uniform excise rates and eliminating disparities between local and foreign cigarette manufacturers, Pakistan can streamline its taxation system and alleviate the healthcare costs associated with tobacco-related illnesses.

Country Head of Campaign for Tobacco Free Kids (CTFK), Malik Imran Ahmed, underscored the alignment between the IMF’s recommendations and ongoing discussions within Pakistan. These discussions aim to address fiscal and external sustainability weaknesses while promoting economic recovery and inclusive growth.

Ahmed said that as Pakistan continues to navigate economic challenges, it is imperative for policymakers to heed the IMF’s recommendations regarding tobacco taxation. By prioritizing public health and fiscal sustainability, Pakistan can pave the way for a healthier and more prosperous future for its citizens.

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