ISLAMABAD: Speakers Sunday asked the Federal Board of Revenue (FBR) to implement Health Ministry’s recommendation for an immediate increase in tobacco taxation for the fiscal year (2024-25)

On Sunday, the Society for the Protection of the Rights of the Child (SPARC) organised a policy dialogue on tobacco taxation to highlight the contribution of the tobacco industry to Pakistan’s economy and the health cost burden due to tobacco use.

Murtaza Solangi, former Caretaker Minister of Information and Broadcasting of Pakistan said that low cigarette prices are the reason why children and youth initiate smoking. He added that smoking-related illnesses and deaths incur substantial economic costs in Pakistan’s GDP every year. These increasing health cost burdens encompass healthcare expenses, productivity losses due to illness and premature death, as well as, other indirect economic impacts.

He further added that the tobacco epidemic requires comprehensive strategies encompassing public health interventions, strong tobacco control policies and awareness campaigns.

By tackling tobacco use, Pakistan can mitigate economic losses associated with smoking-related illnesses, potentially alleviate the burden on its healthcare system and keep young people safe from the harms of tobacco use.

Malik Imran Ahmed, Country head Campaign for Tobacco Free Kids (CTFK), shared in detail that the recent Federal Excise Duty (FED) reforms on tobacco have demonstrated promising results in terms of revenue generation. The tax collection from July 2023 to January 2024 has already surpassed Rs 122 billion, with projections for the full year exceeding Rs 200 billion, marking a substantial increase compared to previous fiscal years.

Furthermore, these reforms are expected to generate an additional Rs 60 billion in General Sales Tax (GST) on cigarettes for the fiscal year 2023-24. The combined impact of FED and GST is estimated to be around PKR 88 billion, indicating a remarkable relative growth of nearly 49% compared to the previous year.

Copyright Business Recorder, 2024

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