Tobacco Industry's profit margin increased due to shifting of tax burden on customers

12:48 AM | 6 Jun, 2023
Tobacco Industry's profit margin increased due to shifting of tax burden on customers

ISLAMABAD - The Society for the Protection of the Rights of Child (SPARC) issued a press release to highlight the Tobacco industry’s mischievous ways to earn additional profits from tobacco users. According to health activists, the government should be earning additional revenues from increased tobacco taxation, not the tobacco industry.

Malik Imran, Country Head Campaign for Tobacco-Free Kids, said that the tobacco industry's profit margin increased due to the shifting of the tax burden on customers He further added tobacco industry’s ulterior motive is to earn hefty profits from its consumer that's why the industry has always tried to manipulate the government and tax policies into its favour.

Malik Imran said that cigarette production in May is significantly lower than the rest of the months, indicating the industry's intention to pressure the government from implementing tax increases. The tobacco industry is utilizing every platform to get benefits from its consumers as well as to gain leniency in tax earnings.

The FED shared in retail price continuously declined from 45.7 per cent in 2020-21 to 41.0 per cent in 2022-23 (Aug-Feb). During the same period, the producers' price increased from 41.1 per cent to 44.4 per cent. The overall price increase was 164 per cent and 170 per cent in tier one and tier 2 respectively. Cigarette manufacturers have also kept increasing their net-of-tax price of the economy brand increased by 121 per cent, much higher than the prevailing inflation rate.

Dr Ziauddin Islam, Former Technical Head, Tobacco Control Cell, Ministry of Health, said that cigarette manufacturers have over-shifted the tax burden to consumers to increase their profitability. The Tobacco industry has used various tactics, such as front-loading and abrupt changes in production, to avoid tax hikes and influence tax policy.

Another ploy by the tobacco industry is presenting overblown figures of Illicit trade, to pressurize the government into withdrawing FED from the budget. After a tax increase of over 150 per cent in February 2023, the FED share rose to 51.6 per cent—though it has not increased as much due to tax over-shifting by the cigarette industry and remains lower than the widely-accepted benchmark of 70%. The consumer price increased by PKR 131. Similarly, the price increase of premium brands was more than the tax increase. This way, the cigarette industry has over-shifted the tax increase.

Khalil Ahmed Dogar, Program Manager, SPARC, said that the tobacco industry is directly targeting the youth’s future and the government’s economic well-being. He further added that FBR has started countering illegal cigarette packs successfully by implementing a track & trace system on tobacco. To end this tobacco menace, we must understand the underlying facts and truth of the tobacco industry’s wrong approach which only focuses on its own profits at the expense of its customers.

Web Desk
Web Desk

Daily Pakistan Global Web Desk


Today's currency exchange rates in Pakistan - Dollar, Euro, Pound, Riyal rates on Sept 30, 2023

KARACHI - Following are the foreign currency exchange rates for US Dollar, Saudi Riyal, UK Pound Sterling, U.A.E. Dirham, European Euro, and other foreign currencies in Pakistan open market on September 30, 2023 (Saturday).

Source: Forex Association of Pakistan. (last update 09:00 AM)

Currency Symbol Buying Selling
US Dollar ‎USD 286.05 289.15
Euro EUR 307 310
UK Pound Sterling GBP 353.3 357
U.A.E Dirham AED 80 80.8
Saudi Riyal SAR 76 76.75
Australian Dollar AUD 189 191
Bahrain Dinar BHD 778.84 786.84
Canadian Dollar CAD 220 222.2
China Yuan CNY 40.24 40.64
Danish Krone DKK 41.83 42.23
Hong Kong Dollar HKD 37.93 38.28
Indian Rupee INR 3.57 3.68
Japanese Yen JPY 1.63 1.71
Kuwaiti Dinar KWD 945.27 954.27
Malaysian Ringgit MYR 62.62 63.22
New Zealand Dollar NZD 174.58 176.58
Norwegians Krone NOK 27.87 28.17
Omani Riyal OMR 762.31 770.31
Qatari Riyal ‎QAR 80.69 81.39
Singapore Dollar SGD 208 210
Swedish Korona SEK 26.62 26.92
Swiss Franc CHF 323.01 325.51
Thai Bhat THB 8.12 8.27

Gold Rate in Pakistan Today – September 30, 2023

Today Gold Rate in Pakistan

KARACHI - The price of a single tola of 24-karat gold in Pakistan is Rs 205,600 on Saturday.

The price of 10 grams of 24k gold was recorded at Rs 176,270. Likewise, 10 grams of 22k gold were being traded for Rs168,730 while a single tola of 22-karat gold was being sold at Rs196,807.

Note: The gold rate in Pakistan is fluctuating according to the international market so the price is never been fixed. The below rates are provided by local gold markets and Sarafa Markets of different cities.

Today Gold Price in Pakistan - 30 September 2023

City Gold Silver
Lahore PKR 205,600 PKR 2,450
Karachi PKR 205,600 PKR 2,450
Islamabad PKR 205,600 PKR 2,450
Peshawar PKR 205,600 PKR 2,450
Quetta PKR 205,600 PKR 2,450
Sialkot PKR 205,600 PKR 2,450
Attock PKR 205,600 PKR 2,450
Gujranwala PKR 205,600 PKR 2,450
Jehlum PKR 205,600 PKR 2,450
Multan PKR 205,600 PKR 2,450
Bahawalpur PKR 205,600 PKR 2,450
Gujrat PKR 205,600 PKR 2,450
Nawabshah PKR 205,600 PKR 2,450
Chakwal PKR 205,600 PKR 2,450
Hyderabad PKR 205,600 PKR 2,450
Nowshehra PKR 205,600 PKR 2,450
Sargodha PKR 205,600 PKR 2,450
Faisalabad PKR 205,600 PKR 2,450
Mirpur PKR 205,600 PKR 2,450


Follow us on Facebook

Follow us on Twitter

Sign up for Newsletter