Government Could Earn Rs364 Billion Through Tobacco Tax In FY 2023-24

Government Could Earn Rs364 Billion Through Tobacco Tax In FY 2023-24
The tobacco sector has been in the limelight for tax theft. Recently, the Defence Minister Khwaja Asif said in the National Assembly that the tobacco sector is responsible for tax theft. Anti-tobacco activists claim that the government can earn Rs364 billion from the tobacco sector in the fiscal year 2023–24.

Economists, however, say that to achieve the target, the government must remain steadfast on its February 2023 decision to increase FED on cigarettes if it wants to safeguard our youth from the harms of tobacco.

The Society for the Protection of Rights (SPARC) says this additional revenue can be utilised to strengthen public health infrastructure. Mr Malik Imran, Country head of Campaign for Tobacco-Free Kids (CTFK) says higher tobacco taxes are a win-win situation for the government.

This decision helps the country generate revenue and decrease tobacco consumption at the same time. It is also recommended by World Health Organization. He added that Tobacco Industry is leaving no stone unturned to undo the great work done by the government of Pakistan in the current year to safeguard children and low-income groups from the harms of tobacco.

Imran added that the good work done by the government of Prime Minister Shahbaz Sharif must not be lost. The government can stabilise the economy and provide relief to citizens as long as it doesn’t get sidetracked by the deceptive campaign of the tobacco industry.

Dr Ziauddin Islam, Former Technical Head, of the Tobacco Control Cell, Ministry of Health, said that despite spending millions on misinformation campaigns, the lies of the tobacco industry are now fully exposed. This year tobacco industry has practiced tactics, such as front-loading and abrupt changes in production, to avoid tax hikes and influence tax policy.

The tobacco industry has also presented overblown figures of illicit trade, to pressurize the government into withdrawing FED in the budget. He mentioned that tobacco is the largest silent killer in Pakistan as above 170,000 people die due to tobacco use each year. This pandemic also causes an annual economic burden of 615 billion which is 1.6% of Pakistan’s GDP.

The tobacco industry has caused billions of losses to the national exchequer. He mentioned that, on average, Pakistani smokers spend 10% of their monthly income on cigarettes. Around 1200 Pakistani children between the ages of 6-15 years start smoking every day. The sale of cigarettes to minors and near educational institutions remains a constant worry in the country. Therefore, increasing the FED will make cigarettes out of reach for low-income citizens and children, thus putting them out of harm's way.