Cigarette tax hike expected to generate Rs 200B for the government.
The Government Decide to Increase Tax on Cigarettes, one in every 94 of Pakistan’s 31 million adult smokers compelled to give up because of increased tax on cigarette prices. The money saved is then used to satisfy other necessities, such as paying for utilities, as well as to buy food and educate children. According to the survey,
The tobacco sector paid a record amount of tax in the previous fiscal year, totaling price Rs 148 billion dollars. In Pakistan, smoking contributes to 337,500 fatalities yearly.
“Tobacco high taxes help reduce cigarette sales in Pakistan,” read the heading of the research report. According to on-the-ground studies conducted in Islamabad, Rawalpindi, Lahore, and Peshawar this year, a large increase in federal excise duty from 146 percent to 154 percent in February prompted smokers to stop.
The study showed that smokers forced to quit smoking following a massive increase in Federal Excise Duty (FED) of 146-154 percent in February 2023. As per data, smokers were saving money by quitting smoking to meet other needs such as food, education, the health of their children, and utility bills.
Research revealed the smuggling of premium cigarettes in the local market remained a major concern for federal authorities who have failed to stop the prevalence of such items in local markets.
The survey also mentioned that companies looking to offset losses due to high taxes were trying to push local sales by selling smuggled brands at lower prices in Pakistan.