Govt Fails to Effectively Tax Tobacco Products
The government of Pakistan has failed to effectively tax cigarettes, which could have generated revenue and discouraged tobacco consumption. This was revealed by Tobacconomics, a think tank and policy group on tobacco control.
Tobacconomics has released a detailed report on the taxation on cigarettes in 170 countries, scoring them on a five-point scale on several parameters of the cigarette tax. Pakistan has scored 0.88 points out of 5.
This puts Pakistan on the lowest end of the scorecard, which utilizes data from the World Health Organization’s (WHO) Global Tobacco Control Reports to score the countries. The scoring then provides policymakers with an actionable assessment.
There are four parameters used for this scoring, namely,
- Absolute price of cigarettes
- Changes in affordability
- Tax share of the price
- Tax structure used
Pakistan scored only 0.88 points because of its low tax rate on cigarettes. The report also suggested that the government of Pakistan imposes “a uniform specific tax on cigarettes that comprises at least 70 percent of the retail price and is automatically updated to stay ahead of inflation and income growth.”
On the other end of the spectrum are countries like Australia and New Zealand, which scored the highest at 4.63. The report highlights their high, uniform specific cigarette excise taxes with regular increases that have significantly reduced the affordability of cigarettes.
Country Head of the Campaign for Tobacco-Free Kids, Malik Imran Ahmed, urged the government to reform cigarette tax policies to boost the revenue. This will reduce the burden on health infrastructure while also reducing the affordability of tobacco products for the youth.
Ahmed said that the multinational tobacco companies were filling their coffers at the expense of lives of more than 170,000 annual casualties due to tobacco-related diseases.
The World Bank has also suggested multiple times that the governments increase the tax on tobacco products by at least 30 percent annually, to boost the revenue and cut down the number of smokers.