A study by Capital Calling, a network of academic researchers and professionals, a few months ago proved to be correct, as it revealed that one in 94 smokers quit after the price hike.
ISLAMABAD: (UrduPoint/UrduPoint / Pakistan Point News – 17th Apr, 2024) Cigarette consumption in Pakistan has seen a significant decline after the government took a bold decision to raise taxes to address the twin challenges of public health and revenue generation.
A study by Capital Calling, a network of academic researchers and professionals, proved correct a few months ago, revealing that one in 94 smokers quit after the price hike.
“The government’s decision to raise taxes has proven to be a key strategy to address public health and revenue shortfalls,” the report said.
The government finally agreed to the tax increase after persistent lobbying efforts by many anti-tobacco and social activists.
In a landmark move, the FBR increased the duty on Class 1 cigarettes from Rs 130 to Rs 330, resulting in a significant net increase of 154 per cent.
The decision was aimed at increasing revenue to Rs 200 billion from Rs 148 billion in the current fiscal year.
According to details, the survey was conducted in major cities including Islamabad, Rawalpindi, Lahore and Peshawar.
The voices of the smokers interviewed reflected a common sentiment – ​​buying cigarettes has become a financial burden, leading them to prioritize spending on basic needs such as food and their children’s education.
The findings of the survey provided strong evidence in favor of higher taxes – the tobacco industry caused a staggering loss of around 620 billion rupees annually in terms of diseases including cancer, chronic respiratory diseases and cardiovascular diseases, in addition to 337,500 deaths every year.
Pakistan has lost a staggering 567 billion rupees in potential revenue due to the influence of cigarette companies lobbying for low taxes over the past seven years.
“Despite losses on various fronts, including public health and revenue, pervasive propaganda has been an obstacle to the introduction of higher taxes*
Multinational tobacco companies have expressed concern over the prevalence of illicit and illicit cigarettes in the Pakistani market, suggesting a share of nearly 40 percent.
However, surveys and on-site interviews contradicted these claims and revealed that the actual proportion of illegal and illegal cigarettes was no higher than 18 percent. This number included smuggled brands from the multinationals themselves expressing concern.
Evidence suggests that cigarette sales would further decline across Pakistan in the coming months if the government were to further increase FED in the tobacco sector.
