Tobacco firms may show less production after FED hike: PANAH

ISLAMABAD: Sana Ullah Ghumman, General Secretary and Director Operations of Pakistan National Heart Association (PANAH) Saturday cautioned that the multinational tobacco companies might show less production to the government after major raise in the Federal Excise Duty (FED) on cigarettes in mini-budget from February 14, 2023.

In a statement issued on Saturday, he said the government should stand by its decision of raising the FED, as this would help collect additional revenue of Rs60 billion from this sector.

The average Pakistani would spend around 10 percent of their total monthly income on cigarettes, he said, adding that higher taxes on tobacco products were the only solution to protect the youth from the menace.

He claimed that the said companies may show their production less to the government and then sell their underreported stock in the open market, causing a loss of billions of rupees to the national exchequer.

A recent report released by a global research organization (Our World in Data) has endorsed the fact that tobacco smoking is one of the world’s largest health problems. “Millions of people live in poor health because of smoking and researchers estimate that every year around 8 million people die an early death due to smoking,” it said.

The situation, health activists said, was more precarious in Pakistan as compared to neighbouring countries. Commenting on Our World in Data report, Dr Hassan Shehzad, from IIUI, said that the report mentioned a decline in the number of smokers worldwide. He said that the prevalence of smoking is coming down because developed countries have placed health levies and higher taxes on this harmful product.

The report estimated around 100 million deaths occur because of smoking in the 20th century. Currently, according to a World Bank study, over 80% of global deaths from cancer, diabetes, heart and lung disease occur in low and middle income countries, and this disparity is likely to grow based on current tobacco use patterns.

Applying evidence-based interventions, such as significant tobacco tax and price increases, comprehensive smoke-free policies, and bans on all tobacco product advertising, promotion, and sponsorship would reduce the demand for tobacco products and significantly reduce the prevalence of tobacco use and the resulting death, disease, and economic costs.

Khalil Dogar, from SPARC, said that there is a need to increase prices of cigarettes to make it harder to access.

He says that the recent increase in the FED on cigarettes was in line with the recommendations of the World Health Organisation (WHO), therefore the public should support the government’s move to discourage tobacco consumption.

Copyright Business Recorder, 2023