ISLAMABAD: The pervasive influence of Pakistan’s cigarette industry on policy-making has not only taken its toll on public health but also caused a staggering Rs567 billion loss in potential revenue over the last decade.

The alarming loss of revenue was unearthed through a comprehensive study delving into the dynamics of the cigarette sector and scrutinising Federal Board of Revenue (FBR) data by the SDPI.

According to a study by the Pakistan Institute of Development Economics (PIDE), the total costs attributable to smoking-related diseases and deaths in Pakistan for 2019 reached an additional Rs615.07 billion ($3.85 billion), with indirect costs (morbidity and mortality) making up 70pc of the total cost.

However, the cigarette industry managed to influence decision-making, which not only resulted in a Rs567 billion loss in potential revenue but also put an extra burden on the country’s fragile healthcare system, the SDPI study reveals.

In its report titled “Pakistan: Overview of Tobacco Use, Tobacco Control Legislation, and Taxation,” the World Bank has also revealed that the decline in government revenue in the 2016–2017 fiscal year was carefully planned by the powerful cigarette industry.

The study brings attention to the influence of multinational companies and the introduction of a three-tier excise duty structure, raising concerns about tax evasion and its adverse effects on public health.

The World Health Organisation (WHO) emphasises the need to safeguard tobacco tax policies from the vested interests of cigarette companies for effective development, implementation, and enforcement of public health initiatives. However, it did not happen in Pakistan, the study said.

The National Accountability Bureau (NAB), Senate Special Committee, and Auditor General of Pakistan Revenue (AGPR) have also endorsed the challenges posed by the multinational cigarette industry, according to the study.

The cigarette industry in Pakistan is dominated by two multinational companies that sell household brands across Pakistan, which gives them immense control and influence over policymakers. The multinationals have long been blamed for forcing the government to rely on questionable data on the cigarette market.

As the nation grapples with these alarming findings, experts suggest that implementing high taxes on cigarettes can serve as a proactive measure in promoting public health while simultaneously bolstering the nation’s economic well-being, the SDPI said.

Published in Dawn, January 4th, 2024