Study Calls for Further Hike in Taxes on Tobacco Products

The prevalence of tobacco use in Pakistan has reached alarming levels, with approximately 31 million adults, or about 19.7 percent of the adult population, currently consuming tobacco products.

In a recent study titled “Raising Tobacco Tax Rates to Promote Public Health and Increase Revenue,” it was revealed that tobacco use resulted in an estimated 337,500 deaths in 2022 alone. The burden falls disproportionately on poorer households, as they spend a larger proportion of their budget on tobacco, thereby leaving less room for essential needs.

The consequences of this habit have severe implications for both public health and the economy, as tobacco use remains the leading cause of death due to non-communicable diseases (NCDs) such as cancer, chronic respiratory diseases, and cardiovascular ailments.

One concerning trend identified in the study is the affordability of cigarettes, which has increased due to low tobacco taxes and the absence of tax hikes from July 2019 till February 2023. The average excise tax rate in Pakistan stands at around 45 percent of the retail price, falling short of the widely accepted benchmark of 70 percent. The researchers found that raising excise taxes on cigarettes by 30 percent would lead to a reduction of 200,000 smokers and increase excise tax revenue by at least 25 percent.

Raising taxes on tobacco products through excise tax increases has been proven as the most effective method to reduce tobacco use. Higher prices act as a deterrent for youth initiation and encourage current smokers to quit.

The study recommended raising tobacco excise to Rs. 154 for low-price cigarettes and Rs. 385 for high-price cigarettes. This policy change would result in 200,000 fewer smokers, a 1.2 percent reduction in smoking prevalence among adults, a 1.23 percent reduction in smoking intensity among adults, the saving of 200,000 lives, and an additional total FED revenue of Rs. 27.4 billion—an increase of at least 25 percent.

Addressing the issue of tobacco use in Pakistan requires urgent action from the government to prioritize public health and generate additional revenue. By implementing these recommended policy changes, the country can make significant progress in curbing the detrimental effects of tobacco consumption, saving lives, and securing a healthier future for its citizens, the study added.

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