ISLAMABAD: While commending the statutory regulatory order (SRO) aimed to increase taxes on cigarettes, health activists have said there was more room to generate revenue.
In a statement, Coalition for Tobacco Control Pakistan (CTC-Pak) stated: “Federal Board of Revenue (FBR) has taken a historic step to protect public health. The move will further strengthen sustainable economic growth. But there is room available to increase further taxes on cigarettes, helping a great deal in reducing the affordability of cigarettes, especially among youth.
“The demand for tobacco is strongly influenced by its price. Taxation is the most cost-effective way of reducing tobacco consumption, especially among young people and those on low incomes. Price increases encourage people to stop smoking, prevent others from starting smoking, and discourage ex-smokers from starting smoking again.”
“Studies have shown that the effect of taxation is more pronounced in developing countries. A price rise of 10pc decreases consumption by 4pc in developed countries and by up to 8pc in developing countries. There is considerable scope to increase tobacco prices through taxation. In many countries, cigarette prices have not kept up with increases in the price of other goods and services. Studies have also predicted that cigarette price increases of 33pc would prevent 22-65 million smoking-related deaths worldwide or 5-15pc of all such deaths,” it stated.
In another press release shared by Society for the Protection of the Rights of the Child (Sparc), Malik Imran Ahmed, country head, Campaign for Tobacco Free Kids, mentioned that the government has repeatedly said that it has to take harsh decisions in order to fill the state’s coffers and meet the IMF’s requirement. However, there is one area where increasing taxation is logical and beneficial and that is the tobacco sector.
He mentioned that tobacco-induced diseases caused an annual economic burden of Rs615 billion which was 1.6pc of Pakistan’s gross domestic product (GDP).
“On the other hand, the revenue generated from the tobacco industry is Rs120 billion. When a product is causing this much health loss, a levy must be implemented on it. Pakistan moved in this direction in 2019 by tabling a tobacco health levy bill but it has not seen the light of the day due to continuous interference of the tobacco industry,” he said.
Khalil Ahmed Dogar, programme manager (Sparc) stated that the challenging financial situation requires sustainable measures.
“Pakistan is seeking foreign aid to rescue its citizens from financial disaster. Therefore, the government should take those decisions which can benefit the health and wealth of the public. One-time measures will bring us back to square one and we will have to ask for foreign aid again,” he said.
Similarly, Alternative Research Initiative (ARI) has also welcomed the increase in federal excise duty (FED) on cigarettes.
“It is a step in the right direction. Higher prices of cigarettes influence smokers’ purchase patterns and lead to decreased cigarette consumption. However, at the same time there is a need for ensuring other critical measures to ensure that the consumption of cigarettes is reduced,” according to a statement.
“There is also a need for enhancing the availability of smoking cessation services across Pakistan. This is critical for adult smokers who have been unable to quit smoking. Tobacco harm reduction products can complement the policy measures like increase in taxes on cigarettes and help Pakistan decrease smoking prevalence,” ARI Project Director Arshad Ali Syed said.
Published in Dawn, February 16th, 2023
