Tobacco tax

Published April 30, 2021

EASY access to and the low prices of cigarettes and other tobacco products is a key reason why their use is so widespread in the country. There are reportedly at least 30m tobacco consumers in Pakistan, across all ages and social backgrounds; they end up costing the national exchequer at least Rs615bn every year, or 1.6pc of GDP, in terms of the overall toll on the economy and health infrastructure. The habit of smoking alone comprises a massive 8.3pc of the country’s overall health expenditure that is already critically stretched. It is for this very reason that the WHO rightly recommends imposing a tax that is at least 70pc of the retail price of the cigarette packet. However, the lax tax structure in Pakistan enables tobacco companies to sell cigarettes and other products at cheaper rates while still earning huge profits. It is ironic that the tobacco industry only contributes around Rs120bn to the national economy in terms of taxes but extracts a huge toll economically. However, instead of considering options for reducing the health and economic burden of tobacco use and taking steps to launch an aggressive campaign to discourage smoking and the use of other tobacco products, the government appears to be going in the opposite direction.

Recently, the federal health ministry dissolved the Tobacco Control Cell and terminated the services of its staff. The cell had been set up in 2007 to take steps for discouraging the use of tobacco products in the country. Even more surprising is the fact that the decision to disband the TCC was taken ahead of World Tobacco Day, observed every year in May. Whatever the reason for this strange decision, it will surely appear to observers that Pakistani policymakers are more sympathetic to the concerns of the tobacco giants than about the health of the population. The authorities may want to revise their decision in line with international guidelines regarding tobacco use and industries in the interest of public health.

Published in Dawn, April 30th, 2021

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