ANL 32.21 Increased By ▲ 0.51 (1.61%)
ASC 18.65 Increased By ▲ 1.20 (6.88%)
ASL 26.45 Decreased By ▼ -0.15 (-0.56%)
AVN 91.35 Increased By ▲ 0.85 (0.94%)
BOP 8.21 Increased By ▲ 0.03 (0.37%)
BYCO 11.84 Increased By ▲ 0.49 (4.32%)
DGKC 126.00 Decreased By ▼ -2.50 (-1.95%)
EPCL 48.20 Increased By ▲ 0.05 (0.1%)
FCCL 23.96 Increased By ▲ 0.06 (0.25%)
FFBL 27.90 Decreased By ▼ -0.09 (-0.32%)
FFL 17.79 Decreased By ▼ -0.15 (-0.84%)
HASCOL 11.45 Increased By ▲ 0.25 (2.23%)
HUBC 78.30 Decreased By ▼ -0.70 (-0.89%)
HUMNL 8.64 Decreased By ▼ -0.08 (-0.92%)
JSCL 24.65 Increased By ▲ 0.35 (1.44%)
KAPCO 44.75 Increased By ▲ 0.06 (0.13%)
KEL 4.19 Decreased By ▼ -0.03 (-0.71%)
LOTCHEM 16.31 Decreased By ▼ -0.29 (-1.75%)
MLCF 46.70 Decreased By ▼ -0.35 (-0.74%)
PAEL 36.20 Increased By ▲ 0.32 (0.89%)
PIBTL 11.04 Decreased By ▼ -0.11 (-0.99%)
POWER 10.08 Decreased By ▼ -0.02 (-0.2%)
PPL 90.20 Decreased By ▼ -0.50 (-0.55%)
PRL 26.25 Increased By ▲ 0.31 (1.2%)
PTC 14.00 Increased By ▲ 0.99 (7.61%)
SILK 1.58 Increased By ▲ 0.02 (1.28%)
SNGP 48.20 Increased By ▲ 0.25 (0.52%)
TRG 168.50 Decreased By ▼ -3.30 (-1.92%)
UNITY 49.39 Increased By ▲ 0.14 (0.28%)
WTL 4.26 Increased By ▲ 0.01 (0.24%)
BR100 5,282 Increased By ▲ 24.37 (0.46%)
BR30 27,601 Increased By ▲ 45.56 (0.17%)
KSE100 48,305 Increased By ▲ 53.23 (0.11%)
KSE30 19,479 Decreased By ▼ -58.87 (-0.3%)

ISLAMABAD: The expenses attributable to all smoking-related diseases and deaths in Pakistan cost the national exchequer over $3.85 billion annually, while the tobacco industry’s total tax contribution is nearly 20 percent of the amount.

A policy brief, “The Huge Economic Cost of Tobacco-Induced Diseases in Pakistan,” by the Pakistan Institute of Development Economics (PIDE) revealed this. It said indirect costs (morbidity and mortality) make up 70 percent of the total cost.

The major share (71 percent) of the total smoking-induced cost comes from cancer, cardiovascular, and respiratory diseases.

The actual economic cost, which includes morbidity, mortality, and opportunity costs, is fivefold the tax revenue collected from the tobacco industry, the report stated.

The study recommended that keeping in view the economic and health costs of tobacco consumption, an increase of four to five times the current tax rate is strongly recommended.

However, as a start, it is imperative that the Federal Board of Revenue (FBR) raised excise taxes to meet the WHO’s recommended threshold of 70 percent of the retail price of a cigarette pack.

The study found that despite the evidence that higher tobacco taxation discourages tobacco consumption, Pakistan has a highly lenient tobacco tax policy. Consequently, the tobacco industry enjoys a thriving customer base, currently comprising 24 million active tobacco users.

Former Head of the Tobacco Control Cell Pakistan and country’s former focal person for FCTC Dr Ziauddin Islam said the government should reduce the purchasing power of new smokers by increasing taxes on the tobacco.

He said that once the number of smokers is reduced, this would automatically help bring down the number of tobacco-related diseases and overall health cost in the country.

The PIDE study also said the industry has created an illusion of being one of the largest taxpayers in Pakistan.

Due to the absence of the calculated costs of tobacco consumption in Pakistan, policymakers cannot compare the true economic cost of tobacco consumption with the revenue receipts and submit to the industry’s claims, it said.

In reality, the study said, that tobacco use inflicts substantial costs on Pakistan’s economy—way beyond any tax revenue collected from the tobacco industry.

The report urged the FBR to narrow the tobacco industry’s tax maneuvering space by gradually moving to a single-tier taxation system.

The current tax structure enables the tobacco industry to sell cheaper cigarettes, it said.

A tax policy that effectively reduces tobacco affordability may save millions of youths from being trapped into an indeed expensive life-long loyalty, the study added.

Copyright Business Recorder, 2021