Experts demand raise in tobacco taxes

ISLAMABAD: Experts have urged the government to address the pressing issue of massive tobacco consumption among youth by raising tobacco taxes up to 70 per cent of the retail price,  a bench mark set by the World Health Organization (WHO). 

The proposal comes as government contemplates options to increase revenue collection in the next budget ahead of negotiations with the International Monetary Fund (IMF) for a long-term bailout program.

Pakistan has two-tiered system of Federal Excise Duty (FED) on cigarettes. The country made significant strides and increased the FED on cigarettes in 2022-23. The current FED share in retail prices is 48 percent and 68 percent respectively for low and high tiers.

“It is high time to build on the gains and cut the number of smokers,” said experts.

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Experts said that more than 60 per cent population of the country comprises youth and it was imperative for the government to protect them from the ills of tobacco use.

The data shows that some 19.1 per cent of adults (age 15 and above) currently use tobacco in any form. The tobacco users include 31.8 per cent men and 5.8 percent women.

Revenue collection from July 2023 to January 2024 has reached Rs 122 billion and the figure is expected to surpass Rs 200 billion by year-end. Beyond revenue generation, it helped recouping 17.8% of total healthcare costs associated with smoking-related illnesses in Pakistan.

Tobacco consumption is responsible for approximately 160,000 deaths annually, accounting for a considerable 1.4 per cent of the country’s GDP in healthcare expenses each year.