Govt urged to remain steadfast on its decision of increasing tobacco taxation.

ISLAMABAD -- Health activists urged the government to remain steadfast on its decision of increasing tobacco taxation in order to generate more revenue for the national exchequer.

During an event organized by the Society for the Protection of the Rights of the Child (SPARC) here Wednesday, the health activists presented a Simulation Model on Tobacco Taxation which explained how increased tobacco taxation is a win-win situation for the government and the people of Pakistan.

Malik Imran, Country Head, Campaign for tobacco-free kids (CTFK), mentioned that taxation was a key revenue source for any government and taxing non-essential items such as tobacco must be taxed to maximum in order to ensure fiscal imbalance, so the national exchequer does not suffer by it. He mentioned that due to the government's decision of increasing Federal Excise Duty (FED) on cigarettes in February 2023, an additional 11.3 billion FED revenue was obtained in fiscal year 2022-23 which is an increase of 9.7 percent from the previous year. Furthermore, an additional 4.4 billion VAT revenue was obtained in fiscal year 2022-23 which is an increase of 11.5 percent from the previous year. This additional 15.7 billion revenue makes up 0.201 percent of our GDP which is a significant boost for a struggling economy like Pakistan.

Imran mentioned that these self-explanatory figures reveal that increased taxation is beneficial for economy but the tobacco industry misleads everyone by crying the illicit trade excuse. Imran added that the blown up figure of illicit trade is used to divert people from the under reporting. These companies under-report their production and then sell their non-reported products in the illicit market, causing billions of loss to the national exchequer.

Dr. Ziauddin Islam, Former Technical Head...