Cigarette prices may go up in budget: FBR

ISLAMABAD: In order to discourage the smuggling of the goods including cigarettes, the government is likely to increase the cigarette prices on a minimal ratio, says FBR spokesperson Dr Iqbal Ashraf.

Pakistan is one of the countries where cigarette consumption is increasing with the passage of every year as according to WHO data of 2014, every adult consumes 510 cigarettes on average every year which is alarming. 

In order to control the cigarette consumption especially among the youth, most of the countries have increased the prices so that the young generation may not have easy access to it. But Pakistan is one of the countries where cigarette prices are still among the lowest.

Talking to The News on the issue of cigarette prices, Federal Bureau of Revenue (FBR) Spokesperson Dr Iqbal said the budget proposal was a confidential thing so he could not comment on what the FBR had proposed about duties on cigarette or other items. However he could comment on the issue of curbing smuggled goods which are denting Pakistan’s economy.

“We are doing our exercise to curb the menace of smuggling. However regarding budget proposal and increasing the cigarette prices, I cannot say whether their prices would be decreased or increased. All I can say is that there are chances we might not increase their (cigarette) prices too much which will ultimately discourage its smuggling. However this is not final thing as the cigarette prices in Pakistan are already the lowest in the world which could not be reduced any further”, commented Dr Iqbal.

On the other hand, a well placed source in the Finance Ministry informed that the local cigarette manufacturers were continuously demanding the FBR to reduce the prices of local brands so that they could defeat those involved in the smuggling. The source further informed that the local and multinational companies had also proposed the government to introduce third tier in cigarette duties which would further reduce the cigarette prices.

It is pertinent to mention here that Pakistani cigarettes are already in one of the world cheapest price brackets. Because of the low prices, the demand of the cigarette is increasing alarmingly in Pakistan including the youth.

According to the experts having grip on economy, the government could reduce the smuggling of cigarettes which is being carried out through Afghan border. For this purpose all it needs is controlling the local markets where they are sold which will help in increasing the revenue. Besides controlling the smuggled cigarettes the government needs to increase the prices of cigarette which will not only discourage the Pakistan youth from smoking but also will result in increasing the revenue.