A survey by the Pakistan-based think tank Centre for Research and Dialogue (CRD) claims that following a significant increase in the prices of cigarettes last year, around 18% of smokers have given up the habit.
Around 15% of survey respondents reported reducing their cigarette intake due to the increased prices. This collective response has contributed to an estimated reduction of over 11 billion cigarette sticks in consumption.
The survey findings highlight the decline in overall consumption and reveal a shift in smokers' behaviour.
CRD Director Maryam Gul Tahir said the survey results demonstrate that increasing cigarette prices on the back of tax hikes promises a win-win for both public health and government revenue.
The CRD said the survey findings underscored that high taxation on tobacco and tobacco products is a vital measure in combating tobacco consumption, as advocated by the World Health Organisation (WHO).
It said that historically, the tobacco industry in Pakistan has wielded considerable influence, particularly multinational corporations. However, decisions made by the government in recent years have offered a corrective shift in policies aimed at prioritising public health over industry interests.
In this respect, the government increased the Federal Excise Duty (FED) on cigarettes last year after years of stagnation. The Finance (Supplementary) Act of 2023 saw a spike in FED rates for cigarettes by 146% for economy brands and 154% for premium brands, marking a significant departure from past policies.
This strategic decision has already demonstrated tangible outcomes, with cigarette consumption showing a marked decline. A report by the International Monetary Fund (IMF) recognised this positive trend, noting a 20%–25% reduction in cigarette consumption following the tax hike. Pakistan consumes around 72 to 80 billion sticks of cigarettes annually, inclusive of various sources such as officially produced, smuggled, and untaxed products.
The policy shift not only safeguarded public health but also served as a fiscal measure to alleviate the economic burden associated with smoking-related healthcare costs.
"We urge the government to consolidate the gains and continue the policy of increasing cigarette prices to sustain the decline in consumption," Maryam said.
She said that Pakistan was still lagging behind regional countries and the rest of the world as cigarette prices were still lower domestically than in other countries.
The call for intensified taxation aligns with international guidelines, notably the World Health Organisation (WHO) Framework Convention on Tobacco Control (WHO FCTC), which emphasises the correlation between increased prices and reduced consumption.
The IMF has advocated for a uniform taxation structure on tobacco products to further curtail consumption and boost government revenue.
Similarly, the World Bank pointed out, "A significant revenue gain of 0.4% of GDP (Rs505.26 billion) could be achieved by applying the current rate on premium cigarettes (Rs16.50 per cigarette) to standard cigarettes as well."