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Health advocates call for higher cigarette taxes to protect public health

Solangi says the federal budget wasted a key opportunity to generate significant revenue by increasing taxes on cigarettes

The illustrative image shows a person holding a cigarette between his fingers. — AFP/File

Islamabad: Health advocates have expressed deep concern over the government’s decision to maintain the current tax rates on cigarettes in the federal budget for 2024-25. The session organised by the Society for Protection of Child Rights (SPARC) and Social Policy and Development Centre (SPDC) highlighted the negative implications on public health and revenue generation.

Chief Guest 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 insist that the government implements 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 tax hike despite the need to generate additional revenue to address the fiscal deficit is worrisome. He said the Fed’s revenue target of Rs324 billion for 2024-25 from the tobacco industry is unrealistically high without an increase in taxes on the tobacco sector and even with estimates suggesting a shortfall of over Rs100 billion. The amendments in the Finance Act, 2024 benefit cigarette manufacturers by allowing price increases without additional revenue from excise duty. 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, head of the Campaign for Tobacco-Free Kids, added that the Fed’s price cap increases benefit cigarette companies by allowing them to raise consumer prices without contributing 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 the profitability of 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.

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.