Federal Budget 2024-25: Wasted Opportunity to Increase Cigarette Taxes for Public Health

Islamabad, (Parliament Times): Health advocates have expressed deep concern over the government’s decision to maintain the current cigarette tax rates in the 2024-25 federal budget. The session, organized by the Society for the Protection of Children’s Rights (SPARC) and the Social Policy and Development Center (SPDC), highlighted the negative implications for public health and revenue generation.
The Chief Guest, Mr. Murtaza Solangi, former Federal Minister of Information and Broadcasting, stated, “The Federal Budget 2024-25 squandered a critical opportunity to generate significant revenue by increasing taxes on cigarettes. This revenue could have been invested in public health, reducing the economic burden on our healthcare system. Instead, maintaining current tax rates benefits cigarette manufacturers without additional contributions to excise duty, undermining tobacco control efforts and worsening the public health crisis caused by tobacco use.
He added that we must advocate for policies that put public health first and urge the government to implement measures that balance revenue generation with health objectives.”
SPDC Managing Director Muhammad Asif Iqbal said, “The government’s decision to shield the tobacco industry from any tax hike despite the need to generate additional revenue to address the fiscal deficit is worrisome. The FED’s revenue target of Rs324 billion for 2024-25 is unrealistically high without a tax hike on cigarettes, and estimates suggest a shortfall of over Rs100 billion. The amendments in the Finance Act, 2024 benefit cigarette manufacturers by allowing price increases without additional excise duty revenue. The government should adopt a dual approach of increasing the FED rate and implementing regulations to combat the illicit trade in cigarettes. An effective tobacco control policy should use higher cigarette taxes as a tool to discourage tobacco use and promote public health.”
Prominent tobacco control activist Malik Imran Ahmed, Country Head of the Campaign for Tobacco Free Kids, added that the Fed’s price cap increases only serve cigarette manufacturers by allowing them to raise prices for consumers without contributing any additional excise tax revenue. This approach not only undermines our tobacco control efforts, but also risks exacerbating the public health crisis caused by tobacco consumption.
Dr. Khalil Ahmad, SPARC program manager, said that while the Finance Bill provisions could increase profitability for the tobacco industry, their implications for public health and fiscal policy are significant and controversial. The debate highlights the delicate balance that governments must strike between economic interests, public health priorities to protect Pakistani children and adolescents from addiction and disease, and sustainable fiscal management.
Mr. Mehboob-ul-Haq, CEO of the Human Development Foundation (HDF), stressed that higher taxes on cigarettes are key to discouraging tobacco use and protecting public health. Recent budget decisions underscore the need for continued advocacy to ensure that public health priorities are not overshadowed by industry interests.
The decision has raised alarm among health care advocates and the public, who fear its long-term implications for public health and economic stability. As discussions on the finance bill progress, stakeholders continue to call for a reconsideration of policies that put short-term industry profits ahead of the broader public interest.