ISLAMABAD: The cigarette manufacturers have warned that the proposed 153pc hike in duties and taxes on cigarettes will encourage growth of smuggled and illicit cigarette trade.

In a statement the two cigarette manufacturers -- Philip Morris Pakistan and the Pakistan Tobacco Company said that the proposed increase in taxes would enhance the price of cigarettes by around 250pc, and it will favour illicit cigarette manufacturers as well as its smuggling in Pakistan.

Spokesperson for Philip Morris Pakistan said that the decision would eventually lead to shortfalls in government revenue as the volumes will shift from the tax-paid sector to the non-tax-paid sector as often seen in the past.

On the other hand the anti-smoking activists have applauded the increase in the tax and highlighted that even the World Health Organisation (WHO) has stated that tobacco kills around 166,000 people in Pakistan every year.

Activists referring to the WHO recommendations that tobacco taxes should be at least 75pc of the retail price, have called for more taxes on tobacco products as it would help generate revenue and meet IMF conditionality.

Talking to media here Friday, Dr Hassan Shehzad, of International Islamic University Islamabad (IIUI), said smoking-related diseases cost Pakistan over Rs600 billion.

He added that the additional tax revenue can be used to fund anti-smoking campaigns and support smoking cessation programmes.

He said there was a need to create awareness about these high-end tobacco products as parents do not know what their children are getting addicted to, adding that these non-cigarette products also have to be taxed heavily.

“Increasing taxes on cigarettes was a proven method to reduce tobacco consumption,” Dr Shehzad said, adding that it will make cigarettes less affordable for young people who are often attracted to smoking.

Additionally, the increased tax revenue can be used to fund anti-smoking campaigns, provide support for smoking cessation programmes, and other public health initiatives, Dr Shehzad highlighted.

He countered the argument that increase in taxes will lead to a rise in smuggling and the sale of illicit cigarettes, saying that there was no evidence for it.

Published in Dawn, February 18th, 2023