LAHORE-In order to protect public health in Pakistan, increasing the tax rate on cigarettes is causing the promotion of the illegal cigarette trade.
Experts have urged policymakers to stop the illegal sale of cigarettes instead of increasing the tax on cigarettes to protect public health and prevent the annual loss of billions of rupees to the country’s economy.
In Pakistan, despite the increase in taxes on cigarettes, the trend of smoking continues to grow, which is a question mark on the government’s policy of taxing cigarettes to keep them out of reach to protect public health.
A macroeconomic analyst Osama Siddiqui said that the annual sale of cigarettes in Pakistan has been maintained at 80 billion sticks for many years, which shows that the government policy to make tobacco out of the reach by imposing taxes is a complete failure.
He further said that on the one hand, the purchasing power of the people is decreasing due to the increase in inflation, while the cigarettes that are sold by paying taxes are also becoming more expensive and are becoming out of reach to the people and these cheap illicit cigarettes are attracting more and more people towards smoking.
Illicit cigarettes account for 40% of the cigarette market in Pakistan, two out of every five cigarettes are not taxed, which is why these cigarettes are readily available at half the legal price.
There is a need to improve enforcement capabilities within the country to curb the illicit activity. In the short term till the capabilities catch up, taxes should remain stable because the tax increase will only increase down-trading.