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High tax on cigarettes results in lower consumption: study

By APP
February 15, 2024

Islamabad:Owing to the government’s decision to increase taxes on cigarettes to address its negative impact on public health and enhance revenue generation tobacco consumption in the country has reduced significantly.

This representational image shows smoke emanating from a cigarette. — Unsplash/File
This representational image shows smoke emanating from a cigarette. — Unsplash/File

A study conducted by ‘Capital Calling’, in major cities including Islamabad, Rawalpindi, Lahore and Peshawar revealed that one in every 94 smokers has quit smoking after prices of cigarettes went up, said a press release issued here on Wednesday. The decision was aimed at increasing the revenue to Rs200 billion from Rs148 billion in the current fiscal year and the Federal Board of Revenue elevated duty on tier-1 cigarettes from Rs130 to Rs330, resulting in a significant net increase of 154 per cent in cigarette prices.

Smokers told the surveyors that purchasing cigarettes had become financially burdensome, leading them to prioritize spending on essential needs like food and the education of their children instead of smoking.

The survey found a positive relationship between higher taxes on cigarettes and its lower consumption. Needless to say, the cigarette industry was causing a staggering loss of approximately Rs620 billion annually in terms of diseases including cancer, chronic respiratory diseases, and cardiovascular disease, besides 337,500 deaths each year. The evidence suggests the sales of cigarettes would further decrease in the coming months across Pakistan if the government maintains the taxes.

Endorsing the think tank’s findings, Dr Aman Khan, director of Islamabad-based ‘Waseela Foundation’, said that the government’s decision to increase taxes emerged as a strategy to address both public health concerns and revenue deficits.