Health advocates applaud SIFC, IMF for boosting Pakistan’s economy through tobacco tax hike

ISLAMABAD, JUN 4 /DNA/ – Society for the Protection of the Rights of the Child (SPARC), appreciated Special Investment Facilitation Council’s (SIFC) previous work on investing in better economic decisions. Tobacco tops the list when it comes to increasing taxes on non-essential items for boosting economy. Health activists are hopeful that SIFU will advocate for an increase in cigarettes taxes by 26% in upcoming budget of year 2024-25.

This will be a Win -Win situation for both the economy and public health as it will generate  PKR 17 Billion in revenue and after this tax increase, there is huge potential for long-term savings in health cost recovery by 19.8%.

Malik Imran Ahmad country head Campaign for Tobacco-Free Kids (CTFK) said that, higher taxes on tobacco products can lead to increased revenue for the government. Pakistan currently holds the highest proportion of young people, as 64% of the total population of Pakistan is below the age of 30. While 29% is between the ages of 15 and 29 years. Approximately, 1200 children initiate smoking every day in Pakistan. This number is growing rapidly every year and as responsible citizens and stakeholders we must all take action to protect our future generations from addiction and death.

Revenue from this proposed tax increase will generate billions of rupees for the national exchequer and can then be allocated to various sectors like healthcare, education or infrastructure, which can indirectly contribute to economic growth.

Tobacco is deadly and tobacco-related illnesses are a significant burden on healthcare systems, annually taking lives of around 166,000 people in Pakistan. So reducing tobacco consumption can alleviate some of this burden, freeing up resources for other areas of healthcare.

Dr. Khalil Ahmad program manager SPARC, expressed his gratitude towards the SIFU, mentioning the urgent need to make sustainable decisions right now for strengthening economy in the long run and saving Pakistani children. Which is possible if the proposed 26% tax increase on cigarettes secures a place in the upcoming federal budget 2024-25.

Increasing the price of tobacco products through taxation is the ultimate form of keeping children and young people away from smoking. Higher prices make tobacco products less affordable and less attractive to youth, who are often more sensitive to price increases. This measure can deter youth from initiating tobacco use and encourage current users to quit.