The experts on Tuesday urged the government to adopt a high uniform cigarette excise tax to discourage tobacco use and increase revenue collection in the country.
Addressing a report launching ceremony in the capital, the experts said that the most effective way to reduce tobacco use is to raise the price of tobacco through tax increases and ensure that the tax increases are reflected in prices. They said higher prices discourage youth from initiating cigarette smoking and encourage current smokers to quit.
“Adopting a uniform specific excise tax of Rs 31.2 per pack will lead over half a million current Pakistani cigarette smokers to quit smoking and prevent almost 725,000 Pakistani youth from taking up cigarette smoking,” the experts added.
The experts said that these reductions in smoking will prevent over 550,000 premature deaths caused by tobacco use and at the same time the tax increase will generate over Rs 27 billion in new cigarette tax revenues.
The report “Economics of Tobacco and Tobacco Taxation in Pakistan” launched by Coalition for Tobacco Control (CTC) presented its recommendation for the government for curbing tobacco use in the country.
The report said that adjustments to tobacco tax rates should be implemented so that they retain their real value over time and are not eroded by inflation and so that they result in increases in tobacco product prices that are at least as large as increases in per capita incomes.
The report also urged to increase taxes on other tobacco products to be equivalent to cigarette taxes and to reduce the use of these products. It added that the government should earmark tobacco tax revenues for health purposes including health promotion and tobacco control.
Highlighting on the performance of tobacco sector in the country, the report said that the cigarette market in Pakistan is highly concentrated with two companies controlling 98 percent of the market.
The report added that very few Pakistanis are involved in cigarette manufacturing accounts for less than 0.1 percent of overall manufacturing employment in the country.
Moreover, employment in tobacco farming accounts for only 0.4 to 0.5 percent of agricultural employment in Pakistan.
The report also disclosed that cigarette prices in Pakistan are among the lowest in the world.
“Cigarette excise in Pakistan account for just over half of the price paid by users which is below the level in countries that have taken a comprehensive approach to reducing tobacco use where excise taxes account for 70 percent of the retail price”, the report added.