Cigarette sales decrease after hike in taxes

February 21, 2023 0 Comments

This was the crux of the day-long interactive session of academicians held at a local hotel on Sunday to seek their opinion on the raise in cigarette prices.

There was a consensus that the action demonstrates the government’s dedication to shielding its population from the perils of smoking.

To further lower smoking rates in Pakistan, NGOs and other public health advocates must continue to push for stricter tobacco control laws, said Prof Dr Muhammad Zaman of the Quid-i-Azam University, Islamabad.

“It is vital to invest in public education and effective enforcement of tobacco control laws to achieve a tobacco-free Pakistan,” he said.

He expressed his gratitude by thanking the government for increasing FED after an SRO was released on 14th February 2023. The SRO stated revised taxes on locally produced cigarettes, and FED has doubled on cigarettes (16500/- per 1000 cigarettes if the initial price on the packaging exceeds 9000 per 1000 cigarettes). He further stated that the government can now inflate the national exchequer by billions of rupees from this initiative.

According to Dr Rizwan Safdar of the Punjab University, who agreed with him, smoking is a major issue in Pakistan, where millions of people are dependent on this destructive behaviour. Smoking is a major contributor to a number of illnesses, such as lung cancer, heart disease, stroke, and other respiratory difficulties. The World Health Organization (WHO) estimates that smoking causes around 166,000 deaths per year in Pakistan. This figure is concerningly high, and it necessitates quick action to stop the nation’s tobacco pandemic. A tried-and-true way to decrease tobacco use is to raise the charge on cigarettes. Because of this approach, cigarettes are more expensive, which may deter individuals from smoking—especially young people. Also, the extra tax money can be utilised to assist with smoking cessation programmes and finance anti-smoking ads.

The choice to raise cigarette prices in Pakistan is an important step in the direction of promoting public health. One of the biggest cigarette tax increases in Pakistani history is the government’s effort to raise taxes by nearly 150%. This action will increase cigarette costs, making smoking less accessible to young people who are frequently drawn to it by its low cost.

Tobacco taxes, according to the World Health Organization (WHO), should be at least 75% of the retail price. While the increase in taxes on cigarettes is a welcome move, Pakistan still has a long way to go to reach this goal.

On Wednesday, Finance Minister Ishaq Dar introduced the Finance (Supplementary) Bill 2023 in the nation’s National Assembly, a “mini-budget” that aims to generate Rs 170 billion (in Pakistani currency) in four months to secure the bailout. But how will the country raise that whopping amount? And what does this mean for the common man?

The increase in GST

Prices are already surging in Pakistan; almost all essentials have become unaffordable. Amid this, the financial bill has proposed increasing General Sales Tax (GST) from 17 per cent to 18 per cent. On luxury items, GST has gone up from 17 per cent to 25 per cent.

The increase in GST means that items like ghee will become more expensive and cooking prices will increase.

Also read: Pakistan’s crisis is only going to worsen: What happens if the country defaults

Pakistan Vanaspati Manufacturers Association General Secretary Umer Islam Khan estimated a jump of PKR 3 to PRK 5 per kg/litre in ghee, according to a report in the Dawn newspaper.

Before the latest hike, B-grade ghee and cooking oil were sold for Rs 500 for 900 grammes. The better quality cooking oil and ghee cost Rs 3000 for a tin of five kilos.

Import of edible oils has been hit as Pakistan’s forex reserves have dwindled.

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