Health Experts Push for 40% Tobacco Tax Hike in Budget 24-25

Health experts in Pakistan are calling for a significant increase in tobacco taxes during the upcoming budget deliberations. Their proposal, presented to the Federal Board of Revenue (FBR), recommends a 40% tax hike on tobacco products.

Key Points:

  • Dual Benefits: The proposal aims to achieve two objectives: reducing tobacco consumption and generating additional government revenue.
  • Projected Revenue Increase: A 40% tax hike is estimated to raise government revenue from Rs 240 billion to Rs 336 billion.
  • Reduced Healthcare Costs: This tax increase is also projected to reduce healthcare costs associated with smoking by nearly Rs 200 billion.
  • Effective Deterrent: Experts highlight the success of recent tax hikes in lowering smoking rates, with a 19.2% decline observed after the last increase in Federal Excise Duty (FED).
  • Global Best Practices: The proposal aligns with World Health Organization (WHO) recommendations for high tobacco taxation as a strategy to curb consumption.
  • Addressing Affordability: Currently, low cigarette prices in Pakistan are blamed for encouraging smoking initiation, particularly among youth. Higher taxes would make cigarettes less affordable, deterring uptake and promoting quitting.

Call to Action:

Health experts urge stakeholders to take a unified stance against the tobacco epidemic. They advocate for regular tobacco tax increases and a single-tier tax structure for cigarettes, aligning Pakistan with global best practices.

Looking Ahead:

The FBR is currently considering various proposals for the upcoming budget. The inclusion of this 40% tobacco tax hike remains to be seen. If implemented, this measure has the potential to significantly reduce smoking rates, improve public health outcomes, and generate additional revenue for the government.

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