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Govt urged to increase tax on cigarettes to overcome budget deficit

By Hamid Khan Wazir

ISLAMABAD, Pakistan: Public health activists demanded of Imran Khan-led government to increase tobacco taxes in the upcoming mini-budget, as it will not only help overcome the budget deficit but will help discourage its usage.

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They made the demand in an Online Session organized by the Society for the Protection of the Rights of the Child (SPARC) to discuss the Inflation rate and Tobacco taxes in the current PTI government.

Malik Imran Ahmed, Country Head, Campaign for Tobacco-Free Kids Pakistan said that inflation has raised prices of all essentials, whereas, the prices of cigarettes which is a non-essential and hazardous commodity, remained unchanged due to no tax increase for the last 4 years.

He further added that already cigarette taxation in Pakistan is among the weakest in South Asia, and this makes them easily affordable for youth.

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Malik Imran said that the World Bank’s recommendation of a 30% increase in tax, must be followed that will not only increase revenues for the government but will also reduce tobacco consumption and alleviate health costs.

Speaking to participants Program Manager SPARC, Khalil Ahmed told that the tobacco industry takes the lives of almost 170,000 people yearly and the total costs attributable to all smoking-related diseases and deaths in Pakistan for 2019 are Rs 615.07 billion (US$3.85 billion) whereas, the tobacco industry’s total tax contribution (120 billion in 2019) is approximately just 20 percent of smoking’s total cost.

He further stressed that the health and economic costs of tobacco use are more than five times the tax receipts, even though the tobacco industry is a major taxpayer in absolute terms, the tax contribution of the tobacco industry is a small fraction of what tobacco consumption costs the government and society.

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He further said that the Tobacco Industry misguided the government over illicit trade, according to Tobacco Industry data in January 2021, illegal cigarette costs 40 billion to the economy, and in February 2021 they quoted 77 billion without any justification, whereas according to an Independent Report illicit cigarette market is only 10-15%, he said.

Mr. Shariq Mahmood Khan, CEO of Chromatic Trust said that the tobacco Industry perceives children as replacement smokers. Daily 1200 children initiate smoking which is an alarming situation. Recently tobacco and related industries have increasingly preyed on children and adolescents, engaging in advertising tactics like sponsorships and influencer marketing to target them directly that threaten their health. Govt must raise tobacco taxes to keep them out of reach of children.

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