Stakeholders back proposal for high taxes on tobacco products

ISLAMABAD   -   Stakeholders have put their weight behind the international lender’s recent pro­posal to Pakistan to slap uniform taxes and duties on cigarettes, emphasizing the need to gener­ate maximum revenue from to­bacco sector.

The International Monetary Fund (IMF) has recently proposed a uniform taxation on tobacco sec­tor in Pakistan to tackle the signif­icant economic losses.

Former federal health minister Dr Nadeem Jan has advocated for a substantial 50 percent tax in­crease on tobacco products to con­trol their consumption, especially among youth, citing severe health concerns. His demand is based on article 6 of WHO Framework Con­vention on Tobacco Control.

The Sustainable Development Policy Institute (SDPI) has previ­ously highlighted discrepancies in the tax collection framework. Ac­cording to the SDPI report based on FBR data, Pakistan suffered a loss of Rs567 billion in revenue over the past seven years.

Pakistan’s commitment to the Framework Convention on Tobac­co Control (FCTC) underscores the importance of a unified pric­ing system for cigarettes to regu­late the industry effectively and discourage consumption.

The WHO advocates for robust tax measures to reduce tobacco consumption, citing the effective­ness of a 10 percent increase in to­bacco prices typically leads to a 4 percent decrease in overall tobac­co consumption in high-income countries and up to an 8 percent decrease in low- and middle-in­come countries.

Country Head of Campaign for Tobacco Free Kids (CTFK), Malik Imran Ahmed, remarked policy­makers are urged to heed to the IMF recommendations and imple­ment comprehensive tax reforms to safeguard public health and bol­ster fiscal stability.

A study conducted the Pakistan Institute of Development Econom­ics (PIDE) also highlights the dire consequences of smoking-relat­ed diseases and deaths, with costs amounting to Rs615.07 billion in 2019, equivalent to 1.6 percent of the GDP.

The recent decision by the Paki­stani government to increase the Federal Excise Duty (FED) on cig­arettes has resulted in both reve­nue gains and a reduction in the rate of smoking.

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