Daily Times

An increase of 37% in Federal Excise Duty (FED) on tobacco products has been proposed by the Social Policy Development Centre (SPDC) to reinforce the gains already achieved and to advance further in enhancing public health outcomes and revenue collection. “Pakistan can save as many as 265,000 lives, generate an additional revenue of Rs 37.7 billion and push 757,000 people to quit smoking through increasing the FED by 37 percent,” said the SPDC policy paper name “Recovering Healthcare Costs and Saving Lives” that aligns recommendation of World Health Organization (WHO) and Campaign for Tobbaco Free Kids (CTFK). The SPDC proposal comes when the government prepares to outline its budgetary agenda, in a bid prioritize public health and economic prosperity through targeted tobacco tax reforms. Pakistan has two-tiered system of FED on cigarettes. The country made significant strides and increased the FED on cigarettes in 2022-23 with substantial increase in FED. The current FED share in retail prices is 48 percent and 68 percent respectively for low and high tiers. The SPDC has warned of negative effect on both the revenue and public health efforts if the rates (FED) were not increased and trend was not maintained. Therefore, it advocated to further adjust the FED in line with international standards, to take the tax share of retail prices towards 70 percent.