Tobacco control advocates demand higher tax on low-priced cigarettes

Islamabad
While welcoming the recent tax increase on cigarettes, TheNetwork for Consumer Protection has pointed out that the measure will largely affect those cigarettes that are expensive and hence smoked by a limited number of people. Cigarettes that are maximally smoked will either remain unaffected, or will have nominal tax raise as compared to the tax margin levied on expensive or less-smoked cigarettes.
In his recent budget speech, the minister for finance had said, “Cigarette smoking is a health hazard, and for discouraging people from smoking, rates of federal excise duty on cigarettes are proposed to be increased from 58 percent to 63 percent.” In this regard, the finance bill lying with the parliament has proposed excise tax of Rs3,030 per such 1,000 cigarettes whose price is more than Rs3,350 per 1,000 cigarettes. On 1,000 cigarettes whose price is less than Rs3,350, Federal Excise Duty (FED) of Rs1,320 has been levied.
According to TheNetwork for Consumer Protection, while this will definitely increase the overall prices of cigarettes, at the same time, it will primarily affect the prices of expensive brands that are consumed by fewer people. Talking to the media on Wednesday, the executive coordinator of TheNetwork, Nadeem Iqbal, said the measure will not lower the tobacco consumption necessary to discourage smokers to stay away from health hazard. “In fact, we have been observing over the years that the government increases tax on tobacco but it does not have any effect on sale of cigarettes which always remain on the higher side,” he said. The desired impact on people’s health and wellbeing can only be achieved if taxes are raised on most commonly used inexpensive cigarettes.
Around 60 billion sticks are consumed annually by Pakistanis, costing the nation a huge amount of Rs65 billion,” lamented Nadeem. Instead, he proposed that Rs3,030 FED per 1,000 cigarettes should be imposed on such cigarettes whose per 1,000 price is less than Rs3,350.
“It should be remembered that that this year, the trend of raising the minimum slab of cigarettes, which results in bringing down many brands from higher tax category to lower continues, where less tax is imposed,” Nadeem pointed out.
Referring to the recently released Global Adult Tobacco Survey (GATS), Nadeem said the survey showed that a smoker’s monthly average tobacco cost is Rs767 which is equal to 20 kilograms of wheat flour. In other words, an average tobacco consumer spends as much money on cigarettes as would suffice to purchase wheat flour that would last half a month for an average-sized family. “As such, preventing people from smoking by raising taxes on commonly used inexpensive cigarettes, the government will not only raise their buying power, but will will also serve to discourage youth from initiating smoking. Moreover, raise in taxes is an effective tobacco control measure, and according to GATS, 74.8 percent of adults have favoured increase in tobacco taxes,” he added.
According to Pakistan Demographic Health Survey (PDHS 2012-13), 28 percent of men have been using cigarettes while 1 percent women smoke cigarettes. Moreover, more than 70 percent smoke ten or more cigarettes in a day.