ISLAMABAD: In a bid to control use of cigarettes, the government is planning to increase tax on tobacco products.
According to sources, Minister of State for National Health Services Saira Afzal Tarar has written to the top revenue authority, Federal Bureau of Revenue (FBR), for the increase in taxes on tobacco products in the Federal Budget 2015-16.
In its letter to FBR, and other important federal offices, the NHS ministry has suggested a tax of Rs31.2 on each packet of 20 cigarettes. The NHS proposals will also be presented in the pre-budget consultation meetings. Last year, the tobacco industry generated Rs130 billion in revenue to the national exchequer.
A research study on tobacco taxation in Pakistan, conducted jointly by FBR, World Bank, University of Toronto, Johns Hopkins University, University of Illinois at Chicago and the Beaconhouse National University, concluded that a uniform specific excise tax of Rs31.2 per pack of 20 cigarettes, could reduce overall cigarette consumption by 7.5 per cent, increase tax revenues by Rs 27.2 billion, leading to over half a million users quitting and reducing premature deaths among current adult smokers by over 180,000, while also preventing 725,000 youth from taking up smoking.
According to the letter to the FBR, the NHS ministry has recommended that lower slab of all brands of cigarettes may be taxed at the rate of Rs31.2 per pack of 20 cigarettes and from Rs10.85 to Rs15.6 for pack of 10 cigarettes, with annual adjustment to tobacco tax rates introduced to minimize the impact of inflation and per capita income growth.
