EDITORIAL:
Pakistan’s tobacco taxation policies have come under scrutiny, and it is not good news. A recent study by a network of academics and researchers has highlighted that Pakistan’s tobacco taxation is one of the lowest in the world, which has significant implications for revenue and public health. The study draws a comparison with India, which has the same proportion of smokers as Pakistan, yet generates six times the revenue from tobacco taxes.
The revenue generated from taxes on the tobacco industry in Pakistan amounts to less than $3.85bn annually, a figure that is dwarfed by the government’s expenditure on smoking-related diseases and deaths in 2019. The current scenario is alarming, and it is unfortunate how little attention has been paid to tobacco taxation, which is the main factor behind preventable deaths worldwide. Smoking is associated with multiple health problems, and imposing higher taxes on tobacco products can discourage smokers and reduce overall usage, leading to significant improvements in public health.
Apart from the health benefits, the government’s reluctance to tighten its tobacco taxation policies is costing it a significant revenue stream, which could have been used to improve public services. By not imposing higher taxes on tobacco products, the government is missing out on an opportunity to generate significant revenue that can be utilized to enhance public services like healthcare, education, and infrastructure.
It is high time that the government takes notice of the situation and implements measures to improve the existing taxation policies. The benefits of higher tobacco taxes are multi-fold. Firstly, it will significantly reduce the number of smokers in the country, which, in turn, will improve public health. Secondly, higher taxes will increase revenue generation, which can be utilized for the betterment of public services. In addition to that, higher taxes will discourage young individuals from taking up smoking, thereby reducing the number of future smokers in the country.
The government needs to realize that the short-term gains from the tobacco industry are not worth the long-term damage it causes to public health and the economy. It is time to act in the interest of the public and tighten tobacco taxation policies to generate revenue for public services and promote public health.
To achieve this, the government can consider implementing a range of measures, including increasing excise taxes on tobacco products, removing any exemptions on taxes for the tobacco industry, and increasing the minimum price of cigarettes. Furthermore, the government can also consider using revenue generated from tobacco taxes to fund anti-smoking campaigns, provide free smoking cessation therapy, and improve public health services.
Pakistan’s low taxation on tobacco has been in the limelight lately, with a group of researchers drawing attention to the issue. The network of academics has pointed out that Pakistan has one of the lowest tobacco taxation rates in the world. Comparing the country to India, which has a similar percentage of smokers, Pakistan’s revenue generated from tobacco taxes is only a fraction of India’s. In fact, the revenue generated by Pakistan from cigarette taxes is six times less than India’s, despite having the same proportion of smokers. The revenue collected from taxes on cigarettes is less than $3.85bn, which is less than the amount spent by the government from the public exchequer on smoking-related diseases and deaths in 2019.
It is appalling how little attention has been paid to tobacco taxation, especially when smoking is the leading cause of preventable deaths worldwide. The use of cigarettes is linked to numerous health problems, and imposing additional taxes on tobacco products can help reduce the usage of such products and improve public health. By implementing effective tobacco taxation policies, Pakistan can discourage smokers, reduce tobacco usage, and generate revenue that can be used to improve public services.
However, the government’s approach to cigarette taxation is perplexing. Last year, the government granted tax relief to tobacco companies after increasing taxes. Simultaneously, it raised the taxable price threshold for higher-end cigarette brands. This year, the government has further complicated matters by enforcing an unequal increase in both the minimum sale price of cigarettes and federal excise duty rates. Tobacco companies have warned that this measure will boost the already poorly controlled illicit cigarette trade.
The government should take cues from effective tobacco taxation models implemented in other countries. In such countries, policymakers have successfully addressed the public health threat posed by smoking while generating revenue to improve public goods’ delivery. Careful consideration must be given to tobacco taxation policies to limit tobacco use, reduce harm, and generate revenue for public services.
Pakistan’s government must be diligent and considerate when approaching tobacco taxation policies. The government should be careful not to create confusion in this matter. Instead, policymakers must be strategic and innovative to make the most of tobacco taxation. The government should study successful tobacco taxation models implemented in other countries to achieve the dual goals of reducing tobacco use and generating revenue.
Effective taxation policies can be an effective tool for reducing tobacco usage and improving public health. Moreover, such policies can be a significant source of revenue for improving public services. By increasing taxes on tobacco products, the government can reduce tobacco usage while generating revenue to improve public goods delivery.
In conclusion, it is time for the government to take this issue seriously and implement effective taxation policies for tobacco products. By doing so, the government can address the public health threat posed by smoking, generate revenue, and improve public goods delivery.
Read more:
