Tobacco companies in Pakistan announced an increase in cigarettes prices of 250 percent per pack following the implementation of the government’s PKR170 billion ($649.190 billion) minibudget this week, reports Propakistani.
The budget includes a sales tax increase from 16 percent to 17 percent and a 150 percent increase in the federal excise duty (FED) on cigarettes.
The retail prices of all popular cigarette brands including Marlboro, Gold Leaf, Capstan and Gold Flake, have gone up with the cheapest retailing at PKR211 to the most expensive now on sale for PKR522-525 per pack.
Public health advocates applauded the price hikes, saying that price measures are the most effective way of discouraging tobacco consumption.
Critics say the recent FED threaten legal tobacco companies’ survival because their sales are declining. Others note that the tobacco industry has raised prices above what was required by tax changes.
The industry, they say, has widened the per-packet price differentials by raising consumer rates significantly above the cost of the tax increase on more expensive products and absorbing the tax impact on cheaper products.