ISLAMABAD: The Centre for Research and Dialogue (CRD) has asked the government to implement recommendations of international donor agencies for an increase in Federal Excise Duty (FED) on cigarettes keeping in view economic burden due rising cigarette consumption.

In a statement issued here on Sunday, Amjad Qamar, Director (CRD) stated that increasing FED on cigarettes will check the steady rise in consumption and ensure a healthier future for Pakistan’s youth.

Qamar said that Pakistan is one of the largest tobacco-consuming countries and low price of cigarettes was the major contributor in the respect. “Cigarettes are more affordable in Pakistan than the rest of the region,” he said.

Taxation policies of the successive governments have failed to generate revenue as well as to curb the alarmingly high smoking rate due to policies that are often manipulated by industry giants, particularly the multinational companies.

On the other hand, a study conducted by the Pakistan Institute of Development Economics (PIDE) pointed out that the cost of smoking-related diseases and deaths was Rs 615.07 billion ($3.85 billion) in 2019, amounting to 1.6% of the GDP.

Malik Imran Ahmed, Country Director, Campaign for Tobacco Free Kids (CTFK) referred to a World Banks report titled ‘Pakistan Development Update,’ and said that a significant revenue gain of 0.4 percent of GDP (Rs 505.26 Billion) could be achieved by applying the current rate on premium cigarettes (Rs. 16.50 per cigarette) to standard cigarettes as well.

The report underscores the potential for economic and health benefits through this measure.

Imran added that aligning cigarette taxation with the recommendation is a crucial step toward safeguarding the health and well-being of Pakistan’s children.

Higher excise duty on cigarettes not only deters smoking but also generates much-needed revenue for essential public services, he said.

Copyright Business Recorder, 2024