Civil society welcomes proposal to raise taxes on cigarettes

ISLAMABAD: Representatives of civil society have welcomed the proposal to raise Federal Excise Duty (FED) on middle slab cigarettes in the country.

"If the proposal goes ahead, Pakistan can achieve significant results to boost its revenue and reduce cigarette consumption as well," they said.

They said tobacco control advocates are expecting that the decision by tax authorities will result in an increase in middle slab cigarette prices.

This can certainly help Pakistan to decrease cigarette consumption rates which has jumped from 49.6 billion sticks in 2002- 03 to 75.8 billion sticks in 2008-09.

It is pertinent to mention here that middle slab cigarettes acquire a market share of around 90 percent. Premium market is only 10 percent whereas there are no brands in lower tier of the excise duty structure.

While appreciating the proposal by Federal Board of Revenue, Executive Coordinator, The Network for Consumer Protection, Nadeem Iqbal said there is need to simplify the tobacco taxation system in Pakistan as the current tax system is too complex to comprehend.

Tobacco tax should be increased upto 70% of the retail price, Nadeem said.

The Network for Consumer Protection is spearheading the campaign for effective tobacco control in Pakistan since 1998.     Worldwide, scientific studies suggest that countries can enjoy substantial increase in revenue and decrease health care cost on tobacco related diseases by simply adopting higher price and tax measures.

Higher prices and taxes are considered one of the most effective mean to decrease tobacco use and save governments' money being spent on health care.

Framework Convention on Tobacco Control (FCTC), the international public health treaty by World Health Organisation also suggests parties to increase prices and taxes on tobacco products to decrease tobacco consumption particularly among the youth.

Pakistan has signed and ratified FCTC in 2004 and has taken serious steps to decrease tobacco consumption by introducing multiple tobacco control policies.

Tobacco use is the leading cause of preventable diseases and deaths worldwide. It claims more than 100,000 annual deaths in Pakistan.

Tobacco related diseases and deaths account high cost to nations, emotionally for the families coping with such tragedy and for the health system and economy at large.

World Bank (WB) reported that a 10 percent increase in tobacco price would reduce tobacco use by 4 percent in developed countries and by about 8 percent in developing countries.

Since tobacco taxes has been considered one of the most potent tool to reduce tobacco consumption and numerous economic studies have documented that cigarette price increase can lead to significant reductions in smoking among current smokers and in the number of people who start smoking.

The Network advocates the government while devising tax policies, must take into account the importance of both public health and economic development. The government can not only generate more revenue by imposing higher taxes on tobacco products but also cut down health care cost, experts said.