Taxation Of Cigarettes May Reduce Consumption

(CTN News) – There has been a substantial decrease in cigarettes consumption in Pakistan as a result of the government’s bold decision to increase taxes to address the challenges of public health and revenue generation.

One in every 94 smokers has stopped smoking after the price of cigarettes increased, according to a study conducted by a think tank.

In response to the think tank’s findings, Dr Aman Khan, director of an Islamabad-based NGO, stated, “The government’s decision to increase taxes emerged as a strategy to address both public health issues and revenue deficits.”

In response to persistent lobbying by numerous anti-tobacco and health activists, the government finally increased taxes. As part of the FBR’s groundbreaking initiative, duty on tier-1 cigarettes was raised from Rs130 to Rs330, resulting in a net price increase of 154%.

As a result of the decision, the revenue is expected to increase to Rs200 billion from Rs148 billion in the current fiscal year. Surveys were conducted in major cities, including Islamabad, Rawalpindi, Lahore, and Peshawar, by the think tank.

According to the surveyors, smoking has become financially burdensome, causing smokers to prioritize essential needs such as food and the education of their children over smoking.

It was found that higher taxes on cigarettes were associated with lower consumption of the product.

Obviously, the cigarette industry contributes to a staggering loss of approximately Rs620 billion in terms of diseases, such as cancer, chronic respiratory diseases, and cardiovascular diseases, as well as 337,500 deaths annually.

In the last seven years, Pakistan lost an astounding Rs567 billion in potential revenue as a result of the lobbying efforts of two multinational cigarette companies to reduce taxes.

According to reports, the actual share of illicit and illegal cigarettes on the market is not greater than 18%, contrary to the inflated claim of 40% made by multinational cigarette companies.

It is likely that if the government continues to impose taxes on cigarettes in Pakistan, the sales of cigarettes will decrease further in the coming months as the government continues to impose taxes on cigarettes.

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