SPDC, WHO proposes 37 per cent Tobacco Tax increase to save lives

ISLAMABAD: The Social Policy Development Centre (SPDC) has proposed 37 per cent increase in Federal Excise Duty (FED) on tobacco products to reinforce the gains already achieved and to advance further in enhancing public health outcomes and revenue collection.

“Pakistan can save as many as 265,000 lives, generate an additional revenue of Rs 37.7 billion and push 757,000 people to quit smoking through increasing the FED by 37 percent,” said the SPDC policy paper name

The proposal comes as the government prepares to outline its budgetary agenda, in a bid to prioritize public health and economic prosperity through targeted tobacco tax reforms.

Pakistan has two-tiered system of FED on cigarettes. The country made significant strides and increased the FED on cigarettes in 2022-23 with substantial increase in FED

The SPDC says that if the rates (FED) are not increased and the trend is not maintained, it can negatively affect both the revenue and public health efforts. Therefore, FED should be further adjusted, in line with international standards, to take the tax share of retail prices towards 70 percent.

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