PIDE calls for uniformity in taxing cigarettes

PIDE calls for uniformity in taxing cigarettes

ISLAMABAD, MAR 5 /DNA/ – Health experts and anti-tobacco activists urge the government to harmonize cigarette taxes with WHO guidelines to protect the country’s youth from falling victim to smoking, a consequence of the current affordability of cigarettes*.

Imposition of low taxes on cigarettes in Pakistan make them cheaper that not only increases the number of smokers every year but also smoking related diseases and health bill for the government.

Dr Maleek Haider has an unending number of patients of smoking-induced ailments.

“Most of my patients are poor and bread-winners in their families. I have observed that they start smoking at an early age and fall sick by the time they cross 30,” he said.

His observation strikes a chord with the findings of one of the latest studies on smoking in Pakistan conducted by Pakistan Institute of Development Economics.

It says that 86 percent of the cost of smoking-induced diseases is borne by individuals in 35–64 age group.

Alarmingly, it also states that total cost of mortality and morbidity by smoking accounts for 1.6 percent of GDP of a country that spends less than 1 percent of its GDP on healthcare.

Shedding light on why cigarettes are cheap, the study says that it is due to overlooking at the guidelines set by the World Health Organization (WHO).

The WHO guidelines state that “threshold of 70 percent of the retail price or the level required to cover the costs tobacco makes the country incur. In the latter case, the increase would be four to five times what the tax rate is now. In the short-run, the rates on the two tax tiers should be increased with a higher increase for the second tier so that the gap between them is minimized. In the long run, however, the two-tier system should be abolished to have a single-tier system. This would help in bringing the poor out of the vicious cycle of poverty in addition to reducing the smoking-related disease burden.”

The total revenue collected from cigarettes taxation in the fiscal year 2021-22 was Rs 150 billion. Hence, the economic and health cost imposed by smoking on society is 3.65 times higher than the overall tax collected from the tobacco industry.

Similarly, the smoking-attributable direct cost is 8.3 percent of the total health expenditures, which is significantly high. Likewise, the total economic cost of smoking is almost equal (1.03 times) to the public sector health spending (both federal and provincial), says the PIDE report. 

Anti-tobacco activists have called for increasing taxes on cigarettes instead of utilities such as electricity and gas.

Malik Imran Ahmad, Country Head of the Campaign for Tobacco-Free Kids (CTFK), also pointed out high prevalence of tobacco use in the country, with 31.9 million adults (15 years and above) consuming tobacco products, accounting for about 19.7% of the adult population.

It is estimated that smoking-induced illnesses, such as cancer, diabetes, and heart diseases, contribute to over 160,000 deaths annually in Pakistan.

Dr. Aman Khan director Waseela Foundation says that multi-national cigarette manufacturers know how to manipulate media to mislead the masses into smoking.

He said research has shown that hardly 16 percent of the cigarettes are illicit but the companies propagate that they account for 40 percent. These multinational companies are influential enough to stifle voices of sanity on media, he added.

He said the government needs to build a narrative on modern lines keeping in view the changing nature of media to counter smoking.