Health Experts Urge Tax Increase to Protect New Generation from Tobacco Use
An increase of Rs. 39 in FED per cigarette pack in the budget can yield Rs. 67.4 billion in revenue – Muhammad Asif Iqbal
Raising FED will not only promote economic growth but also save lives by reducing tobacco use – Syed Ishtiaq Gilani
Islamabad ( Web News )
A non-governmental organization working for the protection of children’s rights, Society for the Protection of the Rights of the Child (SPARC), in collaboration with the Social Policy and Development Centre (SPDC), has launched the “Price of Health: Cigarette Tax Simulation Model 2025-26.”
This model provides evidence-based recommendations on how effective tobacco taxation can improve public health outcomes and serve as a revenue source for the government.
According to the model, if the government increases the Federal Excise Duty (FED) by Rs. 39 per cigarette pack in the next fiscal year, it can generate an additional Rs. 67.4 billion in revenue.
Speaking at a local hotel on Thursday, Managing Director of SPDC, Muhammad Asif Iqbal, presented the model and urged Pakistan to take bold steps to address the health risks related to tobacco use while unlocking billions in potential revenue. The Rs. 39 increase in FED could yield Rs. 58.2 billion through FED and Rs. 9.2 billion through GST.
Since February 2023, there has been no increase in FED, and inflation has made cigarettes more affordable. Compared to many other countries, cigarette prices in Pakistan remain low. Clear evidence shows that higher tobacco taxes reduce smoking and increase government revenue.
If immediate action is not taken, 490,000 more people in Pakistan may take up smoking next year. He also pointed out that multinational companies exaggerate the size of the illegal market, underreport their sales, and pressure the Federal Board of Revenue (FBR) to reduce taxes.
Research has shown that the tax increase in February 2023 was a “win-win” policy – cigarette consumption decreased by over 19%, while revenue from FED and GST rose from Rs. 179 billion in 2022-23 to Rs. 298 billion in 2023-24.
Professor Dr. Matiur Rehman, head of the Health Services Academy, presented alarming statistics on tobacco’s impact on health in Pakistan. Over 160,000 deaths annually are linked to tobacco-related diseases. Around 31.6 million adults use tobacco in the country, including 17.3 million cigarette smokers. Approximately 1,200 children aged 10 to 14 start smoking each day. Tobacco use imposes a burden of Rs. 615.07 billion on Pakistan’s economy annually, which is 1.6% of the national GDP.
Syed Ishtiaq Gilani, Chair of the National Action and Coordinating Group Against Violence Against Women and Children (NACG) and CEO of United Global Organization of Development (UGOOD), called on the government to prioritize the proposed tax hike in the 2025-26 budget. He stressed that increasing FED would not only boost economic development but also save lives by reducing smoking. This move would guide Pakistan toward a healthier and more prosperous future.
“Our future generations’ health is at stake, and this is a challenge that cannot be ignored,” he said.
Dr. Khalil Ahmed Dogar, SPARC Program Manager, urged all stakeholders to unite in protecting children and youth from an industry that is causing billions in economic losses. He emphasized that raising tobacco taxes should be a regular and consistent policy, noting that the low price of cigarettes is a major factor luring children and youth into smoking.
Representatives from the Ministry of Finance, civil society members, public health experts, and journalists also attended the event and shared their views on critical tobacco-related issues, especially taxation.