PESHAWAR: The government can generate at least Rs 19 billion in additional taxes if the federal excise tax on cigarettes is increased by 30%, a group of anti-tobacco activists said on Friday.
Campaigners formally submitted this proposal to the Department of National Health Services and Regulation and urged the government to include these proposals in the next budget.
In the 2-page written proposals, they suggested that the government increase the excise tax on tobacco to 43 rupees for low prices and 135 rupees for bonuses, which would result in 219,000 fewer smokers; 3.8 percent reduction in smoking prevalence among adults; 6.4 percent reduction in smoking intensity among adults.
They said the proposed tax regime would also help save at least 76,800 lives and Rs 19 billion in additional total tax revenue – an increase of at least 14.4% over the existing tax collection.
The document shared by anti-tobacco activists says that tobacco taxes in Pakistan are low and cigarettes are cheap.
The average share of excise tax is 45.4% of the retail price, well below the WHO recommendation that the excise tax is at least 70% of the retail price, the document said.
He said cigarette prices in Pakistan are among the lowest in the world and the effective rate of excise tax on cigarettes in 2020-2021 is still the same as it was in 2016-2017.
Cigarettes in Pakistan became more affordable in 2020-2021 thanks to the combination of no change in the federal excise tax and the increase in nominal income and inflation.
The document further states that Pakistan is ranked among the worst performing countries in the tobacco cigarette tax scorecard with a score below one on a five-point scale.
More than 400,000 people are estimated to start smoking in 2020-2021.
Anti-tobacco activists have said tobacco use in Pakistan is deadly as around 30 million adults (aged 15 and over) or about 19.1 percent of adults currently use tobacco.
Smoking is the leading cause of death from non-communicable diseases (NCDs), including cancer, chronic respiratory disease and cardiovascular disease.
In 2017, smoking killed an estimated 163,360 people. Poor households spend more of their budgets on tobacco than rich households in Pakistan, resulting in reduced spending on basic needs, they added.