PESHAWAR: The government can generate at least Rs 19 billion in additional tax revenue if the federal excise tax on cigarettes is increased by 30 percent, a group of anti-tobacco activists said Friday.
The activists have officially submitted this proposal to the Department of National Health Services and Regulations and have urged the government to include these proposals in the upcoming budget.
In the 2-page written proposals, they suggested that the government raise the consumption tax on tobacco to 43 rupees at the low price level and 135 rupees at the premium level, which would result in 219,000 fewer smokers. 3.8 percent reduction in adult smoking prevalence; Reduction in smoking intensity in adults by 6.4 percent.
They said the proposed tax system would also help save at least 76,800 lives and total additional tax revenue of Rs 19 billion – an increase of at least 14.4 percent over the existing tax collection.
The document shared by the anti-tobacco activists says that tobacco taxes are low in Pakistan and that cigarettes are cheap.
The average excise duty share is 45.4 percent of the retail price, well below the WHO recommendation that the excise tax should be at least 70 percent of the retail price, the document says.
Cigarette prices in Pakistan are among the lowest in the world and the effective excise tax rate on cigarettes in 2020-21 is still the same as in 2016-17.
Cigarettes in Pakistan became more affordable in 2020-21 as the federal excise tax was not changed and nominal income and inflation increased.
The document goes on to say that Pakistan is among the worst performing countries on the Tobacconomics Cigarette Tax Scorecard, with a score of less than one on a five-point scale.
It is estimated that more than 400,000 people will start smoking by 2020-21.
The anti-tobacco activists said tobacco use is deadly in Pakistan as around 30 million adults (aged 15 and over), or about 19.1 percent of adults, currently use tobacco.
Tobacco use is the leading cause of death from non-communicable diseases (NCDs), including cancer, chronic respiratory diseases, and cardiovascular diseases.
An estimated 163,360 people died from tobacco use in 2017. Poor households compared to rich households in Pakistan spend more of their budget on tobacco, resulting in less spending on basic necessities, they added.