T he Society for the Protection of the Rights of the Child (SPARC) advocates 26 percent FED increase on cigarettes to bridge the gap between health burden and tax revenue. Muhammad Sabir, Principal Economist at the Social Policy and Development Centre (SPDC), shared the recommendations at an event organized to launch a tobacco taxation simulation model published by the Social Policy and Development Centre (SPDC). The event attended by leading healthcare activists, called for a Tobacco Tax Hike in 2024 to recover healthcare costs and save lives. Sabir said that Pakistan presently operates with a two-tiered Federal Excise Duty (FED) structure for cigarettes, categorized by price tiers. Following a substantial increase in 2022-23, the FED share in retail prices reached 48% and 68% for low and high tiers, respectively. However, the leveling off of the FED share in 2023-24, due to the absence of rate adjustments, could adversely affect revenue and public health efforts. Sabir added that a proposed 26.6% FED increase in 2024 could recoup 19.8% of the costs, narrowing the gap between health burdens and tax revenues. A 26.6% FED hike could potentially lead to 517,000 fewer smokers, a 12.1% increase in tax revenue, and a 19.8% recovery of health costs.
Experts call for FED increase on tobacco to save lives
T he Society for the Protection of the Rights of the Child (SPARC) advocates 26 percent FED increase on cigarettes to bridge the gap between health burden and tax revenue. Muhammad Sabir, Principal Economist at the Social Policy and Development Centre (SPDC), shared the recommendations at an event organized to launch a tobacco taxation simulation […]
