AIRLINK 140.00 Increased By ▲ 12.73 (10%)
BOP 9.14 Increased By ▲ 0.46 (5.3%)
CNERGY 6.48 Increased By ▲ 0.76 (13.29%)
CPHL 64.36 Decreased By ▼ -2.74 (-4.08%)
FCCL 42.70 Increased By ▲ 2.84 (7.12%)
FFL 13.15 Increased By ▲ 0.94 (7.7%)
FLYNG 34.54 Increased By ▲ 3.14 (10%)
HUBC 126.25 Increased By ▲ 7.25 (6.09%)
HUMNL 11.30 Decreased By ▼ -0.14 (-1.22%)
KEL 4.04 Increased By ▲ 0.12 (3.06%)
KOSM 3.96 Increased By ▲ 0.02 (0.51%)
MLCF 65.00 Increased By ▲ 4.13 (6.78%)
OGDC 184.35 Increased By ▲ 4.96 (2.76%)
PACE 4.49 Increased By ▲ 0.50 (12.53%)
PAEL 40.69 Increased By ▲ 3.68 (9.94%)
PIAHCLA 12.25 Decreased By ▼ -1.33 (-9.79%)
PIBTL 7.61 Increased By ▲ 0.51 (7.18%)
POWER 14.00 Increased By ▲ 0.59 (4.4%)
PPL 137.90 Increased By ▲ 5.99 (4.54%)
PRL 24.59 Increased By ▲ 0.33 (1.36%)
PTC 17.83 Increased By ▲ 0.40 (2.29%)
SEARL 69.00 Increased By ▲ 2.35 (3.53%)
SSGC 27.66 Decreased By ▼ -1.56 (-5.34%)
SYM 12.70 Increased By ▲ 0.53 (4.35%)
TELE 5.95 Increased By ▲ 0.35 (6.25%)
TPLP 7.15 Increased By ▲ 0.40 (5.93%)
TRG 57.03 Increased By ▲ 3.90 (7.34%)
WAVESAPP 7.94 Increased By ▲ 0.20 (2.58%)
WTL 1.16 Increased By ▲ 0.06 (5.45%)
YOUW 3.24 Increased By ▲ 0.15 (4.85%)
AIRLINK 140.00 Increased By ▲ 12.73 (10%)
BOP 9.14 Increased By ▲ 0.46 (5.3%)
CNERGY 6.48 Increased By ▲ 0.76 (13.29%)
CPHL 64.36 Decreased By ▼ -2.74 (-4.08%)
FCCL 42.70 Increased By ▲ 2.84 (7.12%)
FFL 13.15 Increased By ▲ 0.94 (7.7%)
FLYNG 34.54 Increased By ▲ 3.14 (10%)
HUBC 126.25 Increased By ▲ 7.25 (6.09%)
HUMNL 11.30 Decreased By ▼ -0.14 (-1.22%)
KEL 4.04 Increased By ▲ 0.12 (3.06%)
KOSM 3.96 Increased By ▲ 0.02 (0.51%)
MLCF 65.00 Increased By ▲ 4.13 (6.78%)
OGDC 184.35 Increased By ▲ 4.96 (2.76%)
PACE 4.49 Increased By ▲ 0.50 (12.53%)
PAEL 40.69 Increased By ▲ 3.68 (9.94%)
PIAHCLA 12.25 Decreased By ▼ -1.33 (-9.79%)
PIBTL 7.61 Increased By ▲ 0.51 (7.18%)
POWER 14.00 Increased By ▲ 0.59 (4.4%)
PPL 137.90 Increased By ▲ 5.99 (4.54%)
PRL 24.59 Increased By ▲ 0.33 (1.36%)
PTC 17.83 Increased By ▲ 0.40 (2.29%)
SEARL 69.00 Increased By ▲ 2.35 (3.53%)
SSGC 27.66 Decreased By ▼ -1.56 (-5.34%)
SYM 12.70 Increased By ▲ 0.53 (4.35%)
TELE 5.95 Increased By ▲ 0.35 (6.25%)
TPLP 7.15 Increased By ▲ 0.40 (5.93%)
TRG 57.03 Increased By ▲ 3.90 (7.34%)
WAVESAPP 7.94 Increased By ▲ 0.20 (2.58%)
WTL 1.16 Increased By ▲ 0.06 (5.45%)
YOUW 3.24 Increased By ▲ 0.15 (4.85%)
BR100 11,241 Increased By 384.8 (3.54%)
BR30 32,134 Increased By 1400.2 (4.56%)
KSE100 107,175 Increased By 3647.8 (3.52%)
KSE30 32,648 Increased By 1170 (3.72%)

ISLAMABAD: The government’s dramatic increase in cigarette taxes has unexpectedly catalyzed a booming illegal market, undermining efforts to curb smoking and reducing tax revenue.

The findings come from a study titled “The Impact of Cigarette Price Increase on Smoking Behavior & Patterns,” conducted by Umeed-e-Sehar, an organization focused on public health initiatives in Pakistan.

The study revealed that 154 percent rise in federal excise duty (FED) on cigarettes, aimed at making smoking prohibitively expensive, has driven consumers towards cheaper, tax-evaded brands.

The well-intentioned policy to reduce tobacco consumption has backfired, as many smokers now turn to the black market for their supplies. This development not only disrupts public health objectives but also complicates regulatory efforts and creates avenues for untaxed, potentially more dangerous products.

A substantial 89 percent of survey respondents admitted their smoking habits remained unchanged despite the price increase, with 80 percent switching to more affordable brands. Alarmingly, 67 percent of these smokers opted for illegal cigarette brands, which do not contribute to tax revenue, while only 33 percent continued to buy tax-paid cigarettes.

The study’s data is drawn from a sample of 1,698 smokers out of 2,000 individuals surveyed, along with insights from 60 retailer shops in cities such as Mardan, Hyderabad, Multan, Faisalabad, Sahiwal, and Gujranwala.

The report highlights that the substantial FED hike on cigarettes has not succeeded in making smoking unaffordable. Instead, the increased taxes have led smokers to switch from premium brands to cheaper, illicit alternatives, contravening the government’s goals.

Retailers confirmed this trend, with 87 percent reporting a surge in demand for cheaper, non-tax-paid cigarettes following the price hike.

Furthermore, 83.5 percent of retailers noted the absence of tax stamps on these products, pointing to widespread tax evasion. The study also revealed that approximately 62.4 percent of respondents now purchase cigarette brands priced between Rs80 and Rs120, indicating a significant shift towards low-cost, untaxed products.

Copyright Business Recorder, 2024

Comments

Comments are closed.