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Govt urged to bring taxes on cigarettes up to 0.4pc of GDP

By Our Correspondent
November 21, 2023
This representational image shows smoke emanating from a cigarette. — Unsplash/File
This representational image shows smoke emanating from a cigarette. — Unsplash/File

Islamabad: Health Advocates have called for immediate implementation of the recent recommendation by the World Bank for an increase in the federal excise duty (FED) on cigarettes. In a press release shared by the Society for the Protection of the Rights of the Child (SPARC), health advocates emphasized that implementation of this recommendation will ensure a healthier and more prosperous future for Pakistan's youth.

Malik Imran Ahmed, Country Director, Campaign for Tobacco Free Kids (CTFK) said in its latest report titled 'Pakistan Development Update,' the World Bank highlighted that a significant revenue gain of 0.4 percent of GDP could be achieved by applying the current rate on premium cigarettes (Rs16.50 per cigarette) to standard cigarettes as well. The report underscores the potential for economic and health benefits through this measure. The federal excise duty collection on cigarettes in Pakistan is currently below its potential, contributing only 0.5 per cent of GDP in revenue during FY21. Cigarette taxation, representing 0.19 per cent of GDP, has remained relatively stable in recent years.

Imran added that aligning cigarette taxation with the WB's recommendation is a crucial step toward safeguarding the health and well-being of Pakistan's children. Higher excise duty on cigarettes not only deters smoking but also generates much-needed revenue for essential public services. Dr. Khalil Ahmed Dogar, Program Manager SPARC said that government should fully endorse the WB's call for increased federal excise duty on cigarettes. This measure can substantially enhance both fiscal resources and public health outcomes, contributing to a safer and more prosperous future for the children of Pakistan. Khalil mentioned that Cigarettes in Pakistan are currently taxed through a dual rate system.