Pakistan offers cheapest cigarette prices in South Asia: study.

ISLAMABAD -- Cigarette prices are the cheapest in Pakistan when compared with other countries in the South Asian region, said a study by Sustainable Development Policy Institute (SDPI).

The study titled: 'Estimating the price elasticity for cigarette and chewed tobacco in Pakistan: evidence from micro-level data,' asked the policymakers to increase tax on tobacco products to make it out of the purchasing power of the youth.

The study said that tobacco industry in Pakistan was opposing any tax increase on the pretext of around 40pc illicit trade of tobacco products.

In the absence of any reliable estimates of price elasticities and illegal trade, policymakers often rely on the data provided by the industry and decide tax regimes that may favour them, it said.

The study highlighted the 2017 case when the industry obtained a favorable tax regime through the introduction of a three-tiered system without restricting the tier shifting of brands. Consequently, the brands in the second tier were shifted to the third tier, with lowest federal excise duty rates by the industry, bringing the cigarette prices down.

It said that based on the data and figures the study would support the idea that tax increase would reduce cigarette demand without raising illicit trade as argued by tobacco manufacturers when opposing any increase in tax rates.

With around 24 million active adult tobacco users, Pakistan ranks among the largest tobacco consuming countries in the world. The prevalence...