A recent research report revealed that cigarette prices in Pakistan are at the lowest in the region. The tobacco tax rate should be increased to prevent cigarettes from buying youth power.
In a recent research study titled “Evidence of Micro-Level Data on Changing Prices of Cigarettes and Tobacco Products in Pakistan,” policy makers called for increased taxes on tobacco products in the country.
The research study made it clear that the tobacco industry in Pakistan is opposed to any increase in taxes in the country which may lead to higher prices, while illicit trade of tobacco is also high. If taxes are increased, the sales may decrease and government may lose tax revenue instead of getting higher taxes.
The most recent example is 2017, when the industry introduced a three-tiered tax system to achieve favorable tax regime and did not develop a clear strategy for cigarette labels with respect to the three tiers they offer.
As a result, Tier 2 brands were moved by the industry to Tier III (with the lowest tax levy rate), lowering cigarette prices.
The research study notes that from a policy-making perspective, the introduction of a three-tiered tax structure and the subsequent increase in cigarette sales confirm higher demand for tobacco.
The rate of tobacco use among men and women in Pakistan is 32.4% and 5.7%, respectively.
The report further stated that Pakistan has already signed the WHO Framework Convention on Tobacco Control 2055 on tobacco control and since then various tax policies have been introduced.
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