Activists Neglect Issue of Illicit Cigarettes Hindering Health Objectives and Govt Revenue

Anti-tobacco activists in Pakistan have come under scrutiny for their singular focus on legal cigarettes, overlooking the widespread presence of illicit and substandard cigarettes.

This approach is raising concerns as it undermines public health efforts and negatively impacts the government’s fiscal revenue which is likely to face a shortfall of over Rs. 80 billion this year.

These activists argue that smoking is fueling the rise of non-communicable diseases in Pakistan, imposing a burden of billions of rupees on the health budget. They propose higher taxes on legal cigarettes as a solution. However, they fail to acknowledge the substantial loss of over Rs. 80 billion caused by illegal cigarettes, which could be used to improve public health.

Interestingly, the unintended consequence of raising taxes on legal cigarettes has been an increase in the sales of illicit cigarettes. Due to a Federal Excise Duty (FED) hike, legal cigarettes have doubled in price, while illegal cigarette brands are sold at significantly lower prices, ranging from Rs. 70 to Rs. 80. This affordability of illegal cigarettes appeals to individuals with low purchasing power due to inflation.

Moreover, these anti-tobacco activists dismiss the true scale of the illicit market in Pakistan. By only considering smuggled cigarettes as illicit, they overlook the significant amount of over 40% of illegal cigarettes being domestically manufactured in AJK and Khyber Pakhtunkhwa without paying excise duties. Contrary to their narrow view, international research firms like IPSOS, Oxford, and Euromonitor provide data that reveals the actual magnitude of the illicit cigarette market in Pakistan.

A recent study conducted by The Capital Calling, an alleged NGO, titled “Higher tobacco tax helps bring down the sale of cigarettes in Pakistan,” has raised concerns. The study states that the government expected to collect Rs. 200 billion from the tobacco industry following the FED hike on cigarettes. However, the tax hike in February increased the target to Rs. 260 billion. Nevertheless, the stated numbers indicate a significant economic loss and strain on public health.

Further to the capital calling research, an HDF report authored by a representative of SPARC claims cigarette illicit trade to be at 12-14 percent disregarding the government’s claim of 32-35 percent. The report accepts all packs with health warnings as legal, ignoring the minimum price mandate.

“The failure of anti-tobacco activists to acknowledge the prevalence and impact of illicit cigarettes raises concerns about their approach. By neglecting the existence of substandard and illegally manufactured cigarettes, they inadvertently hinder public health efforts and compromise government fiscal revenue,” said the spokesperson of Citizens Health Initiative.

He emphasized that it is crucial for the government to address the abundance of illegal cigarettes in the market to protect both the economy and the well-being of its citizens. He urged the government to take decisive action in tackling the issue of illegal cigarettes and safeguarding the well-being of the Pakistani people in order to promote public health and improve the economy.

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