By Asad Cheema
ISLAMABAD: The Society for the Protection of the Rights of the Child (SPARC) organized a policy dialogue on tobacco taxation to highlight the contribution of the tobacco industry to Pakistan’s economy and the health cost burden due to tobacco use.
Speakers have called for an immediate increase in tobacco taxation for the fiscal year 2024–25. It is a win-win situation for the government and the people of Pakistan.
Former Caretaker Minister of Information and Broadcasting of Pakistan, Murtaza Solangi, said, “Low cigarette prices are the reason why children and youth initiate smoking.”
“Smoking-related illnesses and deaths incur substantial economic costs in Pakistan’s GDP every year. These increasing health cost burdens encompass healthcare expenses, productivity losses due to illness and premature death, as well as other indirect economic impacts,” he added.
He further added, “The tobacco epidemic requires comprehensive strategies encompassing public health interventions, strong tobacco control policies, and awareness campaigns. By tackling tobacco use, Pakistan can mitigate economic losses associated with smoking-related illnesses, potentially alleviate the burden on its healthcare system, and keep young people safe from the harms of tobacco use.”
Country head of the of the Campaign for Tobacco Free Kids (CTFK), Malik Imran Ahmed, shared that the recent Federal Excise Duty (FED) reforms on tobacco had demonstrated promising results in terms of revenue generation.
Collections from July 2023–January 2024 had already surpassed PKR 122 billion, with projections for the full year exceeding PKR 200 billion, marking a substantial increase compared to previous fiscal years.
“Moreover, these reforms are expected to generate an additional PKR 60 billion in General Sales Tax (GST) on cigarettes for the fiscal year 2023–24. The combined impact of FED and GST is estimated to be around PKR 88 billion, indicating a remarkable relative growth of nearly 49% compared to the previous year.”
“In addition to the financial benefits, these reforms play a crucial role in promoting public health by reducing tobacco consumption and potentially recovering 17.8% of the total healthcare costs associated with smoking in Pakistan. However, maintaining the current rate could result in a decrease in health cost recovery, highlighting the urgent need for further action,” Imran added.
“To achieve similar levels of health cost recovery observed in 2023–24, a 37% increase in the FED rate for the upcoming year is recommended. This tax proposal presents a clear ‘win-win’ scenario, benefiting both the government and the people of Pakistan by enhancing revenue and safeguarding public health.”
Prof. Dr. Mati ur Rehman, Lung Diseases and Tobacco Control, Health Services Academy, said, “Tobacco-related illnesses, also known as non-communicable diseases such as cancer, diabetes, and heart diseases, contribute to over 160,000 deaths annually in Pakistan. These deaths not only affect individuals but also have long-term impacts on families, communities, and the healthcare system.”
Program Manager of SPARC, Dr. Khalil Ahmad Dogar, said, “The children of Pakistan are being targeted by the tobacco industry so that’replacement smokers’ can be recruited.”
“Around 1200 Pakistani children between the ages of 6 and 15 start smoking every day,” he added.
Khalil added, “All stakeholders must cast their differences aside and unite to protect our children and youth from an industry that is causing billions of dollars in losses to the national exchequer. Increasing tobacco taxes is such a step that should be regularly implemented.”
