ISLAMABAD: The Society for the Protection of the Rights of the Child (SPARC) and the Social Policy and Development Centre (SPDC) have urged the government to increase the Federal Excise Duty (FED) on cigarettes by Rs39 per pack in the upcoming fiscal year, as part of the launch of the Tobacco Fact Sheet 2025.
This proposed increase is expected to generate an additional Rs. 67.4 billion in revenue, while also helping to reduce tobacco consumption and safeguard public health.
Mr. Nelson Azeem, Parliamentary Secretary of the Ministry of National Health Services Regulations and Coordination (NHSR&C), stressed the serious consequences of tobacco use on public health and its widespread impact on society. “The health of our future generations is at stake, and this is a challenge we cannot afford to overlook,” he stated. “The repercussions of inaction are severe, not just in terms of health, but also in terms of the economic and social costs involved.
Dr. Shazia Sobia Aslam Soomro, Member of National Assemblly, strongly urged the government to make this tax increase a priority in the 2025-26 budget.
She emphasized that raising the FED on cigarettes will not only support economic growth but also save lives by reducing tobacco use. By implementing this measure, Pakistan can take a significant step towards a healthier and more prosperous future.
Muhammad Asif Iqbal, Managing Director of the Social Policy and Development Centre (SPDC) stressed the importance of this policy, stating: “Pakistan needs to take bold steps to unlock billions in potential revenue while tackling the public health dangers linked to tobacco use. A Rs. 39 increase in the FED will generate Rs67.4 billion—Rs58.2 billion from FED and Rs9.2 billion from GST. This revenue can be directed towards vital sectors like healthcare, education, and child welfare.” He added that research evidence has shown that the tax increase in February 2023 proved to be a win-win policy. It reduced cigarette consumption by over 19%, while FED and GST revenue increased from Rs179 billion in 2022-23 to Rs298 billion in 2023-24.
Mirza Nasiruddin Mashhood Ahmad, Special Secretary of the Ministry of National Health Services, Regulations, and Coordination, shared concerning statistics regarding the health impact of tobacco in Pakistan. He highlighted that over 160,000 deaths annually are linked to tobacco-related diseases. With 31.6 million adult tobacco users and 17.3 million smokers across the country, Pakistan is facing a major public health crisis, compounded by nearly 1,200 children aged 10–14 starting to smoke every day.
Dr. Waseem Saleem, WHO representative, stated that there is no change in FED since February 2023 and the decrease in the real price of cigarettes due to high inflation made cigarettes more affordable.
Multinational companies exaggerate the share of the illicit market, frontloading and underreporting to evade taxes and to put pressure on FBR for tax reduction.
Further, due to illegal brand switching of premium to the economy by one of the multinational companies cost 7 billion Rs. in 2024-25. He noted that cigarette prices in Pakistan remain lower than in many parts of the world. “There is clear evidence that higher tobacco taxes result in lower smoking rates and higher government revenue. Without urgent action, Pakistan could see 490,000 new smokers in the coming year. The government must take decisive steps to maintain progress and protect public health,” he urged.
Dr. Shabana Saleem, Director General of Health at the Ministry of National Health Services Regulations and Coordination (NHSR&C), urged all stakeholders to work together to protect children and youth from an industry that causes billions in losses to the national economy. She emphasized that raising tobacco taxes should be a regular and consistent measure.
The affordability of cigarettes, she noted, is a key factor driving children and youth to start smoking. She also pointed out that smoking-related illnesses and deaths result in significant economic costs to Pakistan’s GDP each year, including healthcare expenses, productivity losses due to illness and premature death, and other indirect economic impacts.
Dr. Khalil Ahmad Dogar, Program Manager at SPARC, pointed out that the last major FED increase in 2023 led to a 19.2% decline in cigarette consumption, while raising tax revenue from Rs142 billion in 2022-23 to Rs237 billion in 2023-24.
However, the lack of additional tax hikes has made cigarettes more affordable, undermining the positive effects of previous measures.
Prof. Dr. Matiur Rehman, Dean of Allied Healthcare Sciences at the Health Services Academy (HSA), provided a comprehensive analysis of the tobacco epidemic.
He stated that over 1.3 billion people worldwide use tobacco, leading to approximately 8 million deaths annually. In Pakistan, the economic burden of smoking on individuals aged 35 and above is estimated at PKR 615.07 billion.
Other key representatives from Federal Board of Revenue (FBR), and Finance Ministry, Members of National Assembly, representatives of civil society also attended the event and gave their remarks on important tobacco related issues including taxation.
