Number of tobacco consumers exceeds 25 million

There are over 25 million tobacco consumers in Pakistan including 10 million cigarette smokers, resulting in deaths of above 100,000 people every year due to tobacco consumption. This was revealed by Secretary Ministry of National Health Services, Regulations and Coordination Naveed Kamran Baloch in a Senate standing committee meeting held in the Parliament House under the chairmanship of Senator Sajid Hussain Turi.
The secretary said that around 1,200 teenager start smoking everyday that is a dangerous trend and needs to be controlled on urgent basis. The committee was briefed on how introduction of third tier of taxes on tobacco companies resulted in tobacco consumption and financial benefit to the multinational tobacco companies.
Project Manager of Tobacco Control Cell Muhammad Javed said the third slab of the taxes was introduced to control illicit trade of cigarettes, but this resulted in increase of tobacco consumption instead of stopping the illegal trade.
Federal Board of Revenue (FBR) documents available with Business Recorder show that it introduced the third slab of taxes in May last year apparently to control the illicit trade of the cigarettes. The documents show the rate of federal excise duty on the first tier of cigarettes is Rs 3705 per 1,000 cigarettes and Rs 1,649 per 1,000 cigarettes in the 2nd tier.
The documents say that gradual increase in the federal excise duty (FED) on cigarettes took prices to a point where the legitimate industry could not absorb further hike. As a result, volume of the legitimate industry was captured by low-quality and non-duty-paid cigarettes, which also resulted in substantial decline in the government revenue.
The FBR documents say that a third tier was introduced under which an FED of Rs 800 was payable per thousand cigarettes, ie Rs 16 per pack of twenty cigarettes with sales tax at approximately Rs 6.98 per pack to tackle the illicit, non-duty-paid cigarettes.
The enforcement of the third slab of the tax helped legitimate cigarette industry price their lowest brands at approximately Rs 47 to Rs 48 per pack of twenty cigarettes, the documents say. The documents show the net payment of sales tax and FED increased by 11 percent from Rs 20.4 billion to Rs 22.6 billion during the corresponding year.
Zulfiqar Hussain, an FBR official, however claimed that consumption of tobacco reduced in the country due to use of pictorial warnings on the cigarette packs and increased prices in the last two years.