'Higher Tax On Cigarettes Results In Lower Consumption'

A survey conducted by the think tank Capital Calling has shown that one in every 94 smokers has quit smoking after the prices of cigarettes went up

'Higher Tax On Cigarettes Results In Lower Consumption'

Islamabad: Consumption of cigarettes in Pakistan has come down after the government took the bold decision to raise taxes on the injurious product. The higher taxes helped address the challenges of public health and revenue generation. 

A survey conducted by Capital Calling, a think tank, has shown that one in every 94 smokers has quit smoking after the prices of cigarettes went up.
Endorsing the think tank's findings, Dr Aman Khan, director of the Islamabad-based Waseela Foundation, said: "The government's decision to increase taxes emerged as a strategy to address both public health concerns and revenue deficits."

The government finally agreed to increase taxes on cigarettes following persistent lobbying by numerous anti-tobacco and health activists. 
In a groundbreaking move, the FBR elevated duty on tier-1 cigarettes from Rs130 to Rs330, resulting in a significant net increase of 154% in cigarette prices. The decision helped increase cigarette revenues from RS148 billion annually to Rs200 billion in the current fiscal year. 

Capital Calling conducted the survey in major cities of Pakistan, including Islamabad, Rawalpindi, Lahore and Peshawar. 

Smokers told the surveyors that purchasing cigarettes had become financially burdensome, leading them to prioritise spending on essential items such as food and the education of their children instead of smoking.

The survey found a positive relationship between higher taxes on cigarettes and their lower consumption. Needless to say, the cigarette industry has been causing staggering losses of approximately Rs620 billion annually in terms of diseases, including cancer, chronic respiratory diseases, and cardiovascular disease, besides 337,500 deaths each year.

Pakistan lost a staggering Rs567 billion in potential revenue due to the influence of two Multinational cigarette companies (PTC & PMI) lobbying for low taxes over the past seven years. 

"Despite losses on various fronts, including public health and revenue, pervasive propaganda has been a hindrance to implementing higher taxes," Dr. Aman said.

It has also been reported that the actual share of illicit and illegal cigarettes in the market is not more than 18%, contradicting inflated claims of 40% by multinational cigarette companies. This 18% share included smuggled brands from the very multinational companies that had been making the inflated claims.

Evidence suggests the sales of cigarettes will witness a further decrease in the coming months across Pakistan if the government maintains the taxes or further increases them.