Higher Taxes Needed to Make Cigarettes Less Affordable and Increase Revenue

The Issue

The Pakistan urgent need to increase cigarette taxes to curb smoking and boost revenue. With 31.6 million tobacco users and 160,000 deaths annually, smoking imposes a 1.6% GDP burden on the economy. A tax hike in 2023 led to a 19.2% drop in cigarette consumption and a 66% increase in tax revenue. However, a freeze on tax rates since then has made cigarettes more affordable, risking an increase of 490,000 new smokers in 2025-26.

To counter this, the proposed tax increase—raising FED on economy brands from Rs 101 to Rs 140 and premium brands from Rs 330 to Rs 369—could reduce smoking by 6.9%, prevent 264,000 premature deaths, and generate Rs 67.4 billion in additional revenue. The petition urges continued tax hikes, inflation-adjusted increases, and stricter enforcement to sustain progress in tobacco control and public health improvements. 

 

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The Issue

The Pakistan urgent need to increase cigarette taxes to curb smoking and boost revenue. With 31.6 million tobacco users and 160,000 deaths annually, smoking imposes a 1.6% GDP burden on the economy. A tax hike in 2023 led to a 19.2% drop in cigarette consumption and a 66% increase in tax revenue. However, a freeze on tax rates since then has made cigarettes more affordable, risking an increase of 490,000 new smokers in 2025-26.

To counter this, the proposed tax increase—raising FED on economy brands from Rs 101 to Rs 140 and premium brands from Rs 330 to Rs 369—could reduce smoking by 6.9%, prevent 264,000 premature deaths, and generate Rs 67.4 billion in additional revenue. The petition urges continued tax hikes, inflation-adjusted increases, and stricter enforcement to sustain progress in tobacco control and public health improvements. 

 

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