A recent report released by Our World in Data has endorsed the fact that tobacco smoking is one of the world’s largest health problems. “Millions of people live in poor health because of smoking and researchers estimate that every year around 8 million people die an early death due to smoking,” it says.
The situation, health activists say, is more precarious in Pakistan than its neighbors. Commenting on the Our World in Data report, Dr Hassan Shehzad, from IIUI, says that it mentions a decline in a number of smokers worldwide. He says the prevalence of smoking is coming down because developed countries have placed health levies and higher taxes on this harmful product.
The report estimates around 100 million deaths because of smoking in the 20th century. Currently, according to a World Bank study, over 80% of global deaths from cancer, diabetes, heart, and lung disease occur in low and middle-income countries, and this disparity is likely to grow based on current tobacco use patterns. Applying evidence-based interventions, such as significant tobacco tax and price increases, comprehensive smoke-free policies, and bans on all tobacco product advertising, promotion, and sponsorship would reduce the demand for tobacco products and significantly reduce the prevalence of tobacco use and the resulting death, disease, and economic costs. Khalil Dogar, from SPARC, says that there is a need to increase prices of cigarettes to make it harder to access. He says that the recent increase in the FED on cigarettes was in line with the recommendations of the World Health Organisation (WHO), therefore the public should support the government’s move to discourage tobacco consumption. In developing countries, this increase in revenue could help create the fiscal space needed to help achieve their development priorities. Examples from countries such as Egypt, Thailand, the Philippines, and Vietnam demonstrate how these revenues can be channeled into health initiatives, thereby alleviating some of the funding needs for the health sector. The so-called ‘sin tax’ reforms of the Philippines, for example, provided additional tobacco tax revenues to help finance a significant scale-up of subsidized health insurance for poor families.
Sanaullah Ghumman, from PANAH, said the government should stand by its decision of increase the FED as this would help collect additional revenue of Rs60 billion from taxes on cigarettes.
The average Pakistani would spend around 10 percent of their total monthly income on cigarettes, he said, adding that higher taxes on tobacco products were the only solution to protect the youth from the menace.
He pointed out that multinational tobacco companies would show their production less to the government to evade taxes, and then sell their underreported stock in the open market, causing a loss of billions of rupees to the national exchequer.
Analysis of financial panel data from the three cigarette manufacturers listed on the Karachi Stock Exchange reveals that approximately 4 billion cigarette sticks were underreported in 2020-21. The year-by-year estimates show that cigarettes were under-reported by 7.8 percent, 7.9 percent, and 8.6 percent in 2018-19, 2019-20, and 2020-21, respectively. Collectively, the government is estimated to have lost more than PKR 23.5 billion in revenue over the last three years.
The study says that rigorous evidence from across the world demonstrates that increasing the price of tobacco products through higher taxation is the most effective way to reduce tobacco consumption.
Dogar appreciates the government for putting in place a track and trace system which has eliminated any chances of illicit trade of cigarettes. He called for more stringent taxes on cigarettes to protect the health of the masses and earn revenues.
