Cigarettes: Experts for gradual implementation of uniform FED rate

ISLAMABAD: Health experts have strongly recommended gradual implementation of a uniform Federal Excise Duty (FED) rate across all cigarette brands, creating a level playing field for fair competition.

In their budget proposals for 2024-25, a collective presentation of health activists has been made to the government on the issue of “Recovering Healthcare Costs and Saving Lives: An Urgent Call for a Tobacco Tax Increase in the Budget 2024.”

According to the Pakistan - tobacco fact sheet (2024-25), the tax proposal is a clear ‘win-win’ in terms of health and revenue for the government and the people of Pakistan. A general argument that a tax increase may promote illicit trade has been strongly refuted by research evidence showing that tobacco firms manipulate their reported production to influence tax policy and evade taxes.

Beyond 2024-25, the government should strongly consider embedding cost recovery in tobacco tax policy through automatic adjustments to excise taxes, ensuring they cover a certain percentage of total health costs attributable to smoking;

The government should prescribe more ambitious tax increases for the next three years, they maintained.

The presentation further revealed that maintaining the current rate could result in a decrease in health recovery from 17.8% to 15.6%.

Copyright Business Recorder, 2024