Rise in tobacco tax to benefit Pakistan’s economy

ISLAMABAD: The Pakistan Institute of Development Economics (PIDE) has disclosed compelling facts about the burden of tobacco on Pakistan’s economy, causing a surge in the health bill, reports WealthPK.

According to PIDE, the government collected Rs135 billion in revenue from tobacco tax in FY2021, while the total cost attributable to all smoking-related diseases and deaths in Pakistan was Rs615 billion annually. The tobacco industry’s contribution is approximately 22 percent of the total smoking cost.

Intriguingly, during the last three years, there has been no increase in the tobacco tax, while the tobacco health levy bill is still pending.

Talking to WealthPK, Muhammad Ali Kemal, Chief of Sustainable Development Goals (SDGs) at the Planning Commission, said raising taxes on tobacco products had caused an increase in their prices, making them less affordable. He said 64 percent of the population in Pakistan is youth, who could be easily targeted by the tobacco industry.

Kemal said Pakistan’s health expenditure was only 1.2 percent of the country’s GDP, which was very less compared to other Asian countries.

He added that lives could be saved by preventing the consumption of tobacco and that’s only possible when more taxes were imposed on tobacco products to reduce their demand.

‘‘Smoking is a silent killer in our society, with 29 million active users. Each year, 170,000 people die as a result of tobacco-related diseases,’’ said Malik Imran Ahmed, Country Head of the Campaign for Tobacco-Free Kid.

According to Dr. Ziauddin Islam, former technical focal person of the Government of Pakistan to WHO Framework Convention on Tobacco Control (FCTC), ‘‘Tobacco use among our youth is unacceptably high, and this addictive product is harming their mental and physical health.’’

Cigarettes are available in our country at the lowest prices in the region, making them affordable for young people. Increasing tobacco taxes will aid in preventing the youth from smoking.

Owing to the increasing demand for nicotine products, tobacco export increased in the first eight months (July-Feb) of the current fiscal year 2021-2022.

According to the Pakistan Bureau of Statistics (PBS), tobacco exports during July-Feb 2021-22 reached US$36,115, up 62.17 percent compared to the corresponding period of last fiscal year (2020-2021).

Many Asian countries have increased tobacco tax to reduce their consumption. Indonesia increased by 12 percent, Turkey by 47 percent, Russia by 4 percent and the Philippines by five pesos per pack.

Increasing tobacco taxes is the most effective policy to reduce consumption and generate more revenue for the government, which will help finance the health sector (Sehat Sahulat card program).

It is necessary to involve the media to report on the dangers of smoking and tobacco-related diseases. This strategy is still important, as the rise of social media and the rapid spread of misinformation threaten trust in the public health advice.

The media should play a role in highlighting infringements of tobacco control policies and exposing the tobacco industry’s deceptive tactics. The government must enact a National Tobacco Control Policy to ensure tobacco consumption reduction, guaranteed child nutrition, and improved public health.