Saturday April 13, 2024

‘Taxing cigarettes declines smoking by 20 to 25pc’

March 26, 2024
A representational image shows a person holding a cigarette between the fingers. — AFP/File
A representational image shows a person holding a cigarette between the fingers. — AFP/File

Islamabad: The International Monetary Fund (IMF) has revealed that following a significant increase in prices or taxes on tobacco products, the consumption of cigarettes in Pakistan has witnessed a notable decline of 20-25 per cent.

This revelation featured in Technical Assistance Report of the commission- Pakistan Tax Policy Diagnostic and Reform Options. The report was released in February. Earlier, the global lender advocated imposition of uniform excise rates on both local and foreign cigarette manufacturers. The IMF’s proposal, which advocates for equal taxation measures for all cigarette producers, aims to address health concerns associated with smoking while ensuring fair taxation practices. It suggests subjecting e-cigarettes to similar taxation as traditional tobacco products, citing comparable health impacts.

Capital Calling, an Islamabad-based think tank, has endorsed the IMF’s recommendation, aligning it with the guidelines set forth by the World Health Organization (WHO). The objective behind these proposals is to establish equitable taxation across all cigarette products, regardless of their origin. Health activists have rallied behind the IMF’s stance, emphasizing the need for restructuring tobacco taxation in Pakistan.

At a recent event organised by the Society for the Protection of the Rights of the Child (SPARC), activists urged the Government of Pakistan to transition to a Single Tier Tobacco Taxation System, thereby eliminating the existing dual-tier system.

Country Head of Campaign for Tobacco Free Kids (CTFK), Malik Imran Ahmed underscored the alignment between the IMF’s recommendations and ongoing discussions within Pakistan. These discussions aim to address fiscal and external sustainability weaknesses while promoting economic recovery and inclusive growth.