Raising tobacco taxes: experts say significant progress made

ISLAMABAD: Pakistan has made significant progress in raising tobacco taxes with new recommendations of the World Health Organization (WHO) of higher taxes to be implemented in coming budget (2024-25)

Experts told Business Recorder that the WHO recommended that the tobacco excise taxes should be at least 70 percent of the retail price. The WHO recommendations aimed at both saving lives and curbing tobacco consumption.

According to details, there is a two-tiered system of Federal Excise Duty (FED) on cigarettes. Following the increases during 2022-23, current FED share in retail prices stands at 48 percent and 68 percent respectively for low and high tiers.

The Global Tobacco Index said that Pakistan has been a Party to the WHO Framework Convention on Tobacco Control (WHO FCTC) since 2005. Progress has been achieved in enforcing tobacco control measures. However, tobacco industry interference has resulted to weakened policies.

The Global Tobacco Industry Interference Index 2023 has ranked Pakistan at 32 position and noted that tobacco taxes, as a percentage of the retail price, stood at 61 percent whereas the global standard is at 70 percent.

“We urge the government to align its policies with WHO recommendations and save lives,” said Malik Imran Ahmed, Country Head of Campaign for Tobacco Free Kids (CTFK).

In its latest policy paper, “Recovering Healthcare Costs and Saving Lives”, the Social Policy Development Centre (SPDC) has proposed a 37 percent increase in federal excise duty (FED) during next fiscal year’s budget.

The SPDC estimates that the country can save 265,000 lives, generate an additional revenue of Rs 37.7 billion and push 757,000 people to quit smoking through increasing the FED by 37 percent.

Copyright Business Recorder, 2024