Lower taxes, more revenue

Pakistan’s government says that a cigarette federal excise duty (FED) reduction is aimed at convincing smokers currently buying black-market products to switch to duty-paid products.

It says that currently it is losing millions of rupees in revenue to the widespread availability of smuggled cigarettes.

But not everyone is convinced. Writing in The News, Syed Anwer Alam said the introduction of a third-tier federal excise duty on cigarettes, which would result in a 50 percent reduction in tax on tobacco products – was likely to increase their consumption in the country.

Quoting ‘a report’, Anwer Alam said Pakistanis smoked more than 65 billion cigarettes annually, and that more than 100, 000 deaths in the country could be attributed to diseases caused by smoking.

Pakistan was a signatory to the World Health Organization’s Framework Convention on Tobacco Control (FCTC), which called for ‘price and tax measures to reduce the demand for tobacco’.

The minimum FED suggested under the convention was 75 percent.

According to Anwer Alam, a ‘report released by a non-profit organization suggests that the cumulative FED on tobacco products till FY 2016-17 was around 57 percent.’