:In a pleasant surprise by the Federal Board of Revenue (FBR), excise duty on tobacco products has been increased through a statutory regulatory ordinance (SRO). All the stakeholders working to control the menace of tobacco have welcomed this timely move of the FBR.
We appreciate that the government took seriously the recommendations adopted at a high-profile seminar held earlier on 3rd February 2023 by Sustainable Development Policy Institute and participated by the health policy experts and worthy speakers. It speaks about the concerns that civil the society organizations had regarding the spread of tobacco products.
The policy experts also propose imposing high taxes on Heated Tobacco Products (HTPs) and electronic smoking products that have started flooding our markets. SDPI is hopeful of such taxation in near future. Now, the target for tobacco collection for the Fiscal Year 2023 has been met, therefore, we are hopeful that while increasing the taxes for FY-2024 in the next budget, the government will keep this evidence in mind that increase in taxes always ends up in reduced consumption.
In the current move, FBR excise duty has increased from Rs 41 per pack to Rs 101 per pack, and on premium cigarettes, the excise duty has also increased from Rs 130 per pack to Rs 330 per pack. The economy and premium packs will see an increase of 146.3 % and 153.8%, respectively. Since June 2022, the Federal Excise Duty on economy and premium packs has increased by 206.1% and 217% respectively.
Reiterating the need for such healthy measures, SDPI further emphasized the need for a consistent and long-term tobacco taxation policy. We demand of the government to take such measures in a systematic way. Evidence from around the globe implies that increasing the taxes always results in reduction of tobacco consumption. Experts at SDPI believe that HTPs, which Pakistan started regulating recently, should also be brought under heavy taxation.
