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Heavey tax on tobacco reduces cigarette consumption 

12:37 PM | 17 Apr, 2024
Heavey tax on tobacco reduces cigarette consumption 

ISLAMABAD - The consumption of cigarettes in Pakistan has witnessed a significant decline after the government took a bold decision to increase taxes and address the dual challenge of public health and revenue generation. 

A study by Capital Calling, a network of academic researchers and professionals, a few months back proved right. The study revealed that one in every 94 smokers had quit smoking after the price increase.

The report said, “The government's decision to increase taxes emerged as a pivotal strategy to address both public health concerns and revenue deficits.”

The government had finally agreed to increase taxes following persistent lobbying efforts by numerous anti-tobacco and social activists. 

In a groundbreaking move, the FBR had elevated the duty on tier-1 cigarettes from 130 rupees to 330 rupees, resulting in a significant net increase of 154 per cent.

The decision aimed to increase revenue to Rs 200 billion from Rs 148 billion in the current fiscal year. 

According to the details, the survey was conducted in major cities, including Islamabad, Rawalpindi, Lahore and Peshawar. 

The voices of the surveyed smokers echoed a common sentiment - purchasing cigarettes had become financially burdensome, leading them to prioritize spending on essential needs like food and the education of their children. 

The survey findings presented compelling evidence in favour of the higher taxes - the tobacco industry was causing a staggering loss of approximately 620 billion rupees annually in terms of diseases, including cancer, chronic respiratory diseases, and cardiovascular disease, besides 337,500 deaths each year. 

Pakistan lost a staggering 567 billion rupees in potential revenue in the past seven years due to the influence of cigarette companies lobbying for low taxes. 

“Despite losses on various fronts, including public health and revenue, pervasive propaganda has been a hindrance to implementing higher taxes*

Multinational tobacco companies have raised concerns about the prevalence of illegal and illicit cigarettes in the Pakistani market, suggesting a share of close to 40 per cent. 

However, on-the-ground surveys and interviews contradicted these claims, revealing that the actual share of illicit and illegal cigarettes was not more than 18 percent. This figure included smuggled brands from the multinational companies expressing concern.

The evidence suggests the sales of cigarettes would further decrease in the coming months across Pakistan if the government further increased FED on the Tobacco sector.

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Pakistani Rupee exchange rate to US Dollar, Euro, Pound, Dirham, and Riyal - 20 May 2024

Pakistani currency rates against US Dollar and other currencies on May 20, 2024 (Monday) in open market.

USD to PKR rate today

US dollar was being quoted at 277.4 for buying and 280.35 for selling.

Euro stands at 297 for buying and 299.5 for selling while British Pound rate is 348.5 for buying, and 352 for selling.

UAE Dirham AED was at 75.25 and Saudi Riyal came down to 73.50.

Today’s currency exchange rates in Pakistan - 20 May 2024

Currency Symbol Buying Selling
US Dollar USD 277.4 280.35
Euro EUR 297 299.5
UK Pound Sterling GBP 348.5 352
U.A.E Dirham AED 75.25 76
Saudi Riyal SAR 73.5 74.25
Australian Dollar AUD 181 183
Bahrain Dinar BHD 747.77 755.77
Canadian Dollar CAD 203 205
China Yuan CNY 38.49 38.89
Danish Krone DKK 40.25 40.65
Hong Kong Dollar HKD 35.96 36.31
Indian Rupee INR 3.33 3.44
Japanese Yen JPY 1.91 1.99
Kuwaiti Dinar KWD 913.28 922.28
Malaysian Ringgit MYR 58.69 59.29
New Zealand Dollar NZD 169.45 171.45
Norwegian Krone NOK 25.67 25.97
Omani Riyal OMR 730.59 738.59
Qatari Riyal QAR 76.41 77.11
Singapore Dollar SGD 203 205
Swedish Korona SEK 25.67 25.97
Swiss Franc CHF 309.01 311.51
Thai Baht THB 7.57 7.72

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