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November 27, 2020

Increased cigarettes’ sale to prove health disaster

Islamabad

November 27, 2020

Islamabad : The anti-tobacco activists on Thursday said that number of smokers in Pakistan was increasing with the soaring sales of cigarettes which could prove a health disaster for the government if taxes are not increased on tobacco products to discourage their consumption.

The quarterly sales of the multinational cigarette companies have posted a significant surge, according to Pakistan Bureau of Statistics, which experts said was

directly linked to rise in number of smokers in the country.

The activists urged the government to increase the Federal Excise Duty [FED] on cigarettes to discourage their consumption especially in children and youth.

The government cannot only boost its revenue by levying additional taxes on tobacco products, but also discourage the smoking especially in youth, Malik Imran Ahmed, country head of the Campaign

for Tobacco-Free Kids said.

According to the latest reports, Philip Morris (Pakistan) Limited has reported a 53 per cent yearly growth in gross turnover for the post-budget quarter ended September 30, 2020 to Rs8.2 billion. This is presumably due to higher number of cigarette packs sold in the quarter.

The net turnover, however, had a much bigger jump of 103 per cent year-on-year to Rs3 billion, as the FED rate (equal to share of excise duty in gross turnover) decreased from 52 per cent in Jul-Sep 2019 to 45 per cent in Jul-Sep 2020.

The market leader Pakistan Tobacco was also not much forthcoming in its latest directors’ review about the superb growth that this player has also seen in the latest quarter. For context, in the Jul-Sep quarter, the company scored a strong gross turnover growth of 27 per cent and net turnover growth of 41 per cent year-on-year.

Ahmed said the tobacco industry every year tried to manipulate policymakers in order to fill its coffers at the expense of lives of more than 170,000 people who die due to diseases caused and aggravated by the usage of tobacco products.

He said the big tobacco companies would keep at least 37 per cent of their cigarettes production undeclared to evade taxes while blaming presence of illicit cigarettes in the market.

The World Bank would suggest to increase at least 30 per cent tax on tobacco products annually to boost the revenue and cut smokers number, he said, adding that if the FBR would increase tax on tobacco products by 10 per cent, this would lead to a reduction in its consumption by 8 per cent.