Health activists reportedly want Pakistan to increase Federal Excise Duty (FED) on cigarettes to 70% of retail price in line with international standards dawn. Achieving this level would require a 37% rate hike.
Supporters of the measure say the tax increase will not only ease the burden on Pakistan’s health care system, but also bring in much-needed revenue for the government. They estimate that a 37% Fed hike would generate an additional 60 billion rupees ($215.7 million) in revenue from cigarettes in 2023-2024. Revenue collections from July 2023 to January 2024 amounted to Rs 122 billion, with the full year estimated at over Rs 200 billion.
Proponents of the tax increase deny tobacco industry claims that higher tobacco taxes fuel illegal trade and suggest that tobacco companies manipulate reported production volumes to influence tax policy. There is.
About 31.6 million adults in Pakistan currently use tobacco, which causes more than 160,000 deaths each year, and the cost of smoking-related illnesses and deaths accounts for more than 20% of gross domestic product (GDP), activists say. It is said to be at least 1.4%.
Anti-smoking groups are also calling on governments to incorporate medical cost recovery into tobacco tax policies through automatic excise tax adjustments to ensure that a certain percentage of total medical costs attributable to smoking are covered.
