By Hina Kiyani
ISLAMABAD: Health and economic policy experts have urged the government to introduce a regular increase in tobacco taxes and gradually transition to a single-tier taxation structure, as consistent fiscal measures are essential to reduce cigarette consumption and enhance public health outcomes.
Speaking at a webinar titled: “Stagnant Tobacco Taxes in Pakistan: Implications for Affordability, Public Health, and Revenue Mobilization” organized by Sustainable Development Policy Institute (SDPI) here Friday, the experts called for predictable long-term tax policy to address affordability of cigarettes and structural weaknesses in Pakistan’s taxation framework.
Presenting findings from a tobacco taxation scorecard analysis, Dr Waseem Iftikhar Janjua, Visiting Researcher at SDPI, said tobacco taxes in Pakistan had not been increased since 2023, which had impacted the effectiveness of earlier gains achieved through a major tax hike that year. Pakistan’s tobacco taxation scorecard stood at 2.38 compared with the global average of 2.01, while the Eastern Mediterranean region averaged 1.58, indicating room for further policy improvement, he pointed out.
He further said that affordability of cigarettes declined sharply after the 2023 tax increase, but the absence of subsequent adjustments allowed cigarettes to gradually become more affordable again due to inflation and rising incomes.
“Without consistent tax increases, consumption is likely to rise again,” he warned, adding that affordability indicators had already begun declining between 2024 and 2025. He highlighted that Pakistan’s complex multi-tier tax structure enabled smokers to switch from premium to lower-priced brands, undermining the public health impact of taxation policies.
Asif Iqbal, Managing Director of the Social Policy Development Centre (SPDC), stressed the need for a predictable multi-year taxation framework to ensure stability and effectiveness in policy implementation.
He said production data shows recovery in cigarette output over the past two years, reflecting improved affordability in the absence of tax increases. He emphasized that inflation-adjusted automatic tax revisions could help maintain the real value of revenues.
He suggested increasing annual excise duty of about 30–35 percent on lower-tier cigarette brands and gradual alignment of tax rates across tiers over the next three to five years to facilitate transition toward a simplified single-tier system.
Waseem Saleem of the World Health Organization (WHO) said evidence from Pakistan showed cigarette demand responded strongly to price increases, suggesting taxation remained one of the most effective tools to reduce consumption.
He added that enforcement measures such as the track-and-trace system introduced in recent years were helping curb illicit trade. Syed Ali Wasif Naqvi, Senior Research Associate, Centre for Health Policy and Innovation, SDPI said a consistent taxation strategy, combined with enforcement against illicit trade and gradual structural reforms, could significantly reduce tobacco consumption while increasing government revenues and improving public health indicators in the country.
