ISLAMABAD: Health activists have urged the government to transition to a single-tier tobacco taxation system, thereby eliminating the existing dual-tier system.

Speaking at an event organised by the Society for the Protection of the Rights of the Child (SPARC), Country Head of Campaign for Tobacco Free Kids Malik Imran Ahmed underscored the alignment between the IMF’s recommendations and ongoing discussions in Pakistan to address the fiscal and external sustainability weaknesses while promoting economic recovery and inclusive growth.

Mr Ahmed called for reforming Pakistan’s cigarette taxation system as part of broader efforts to strengthen public finances and enhance debt sustainability.

“The IMF’s advocacy for taxation on tobacco products is not only aimed at reducing cigarette consumption but also at generating additional revenue for the government. By implementing uniform excise rates and eliminating disparities between local and foreign cigarette manufacturers, Pakistan can streamline its taxation system and alleviate the healthcare costs associated with tobacco-related illnesses,” he said.

Ahmed said that as Pakistan continued to navigate economic challenges, it was imperative for policymakers to heed the IMF’s recommendations about tobacco taxation.

The IMF has recommended implementing a uniform tax structure on the tobacco industry to increase revenue.

The report titled ‘Pakistan: Tax Policy Diagnostic and Reform Option’ emphasises the need for single-tier taxation on both foreign and domestic cigarette manufacturers in Pakistan.

Published in Dawn, March 28th, 2024