LAHORE – The new government faces the daunting task of effectively coordinating the efforts of the health and finance ministries in order to combat the growing problem of smoking in Pakistan.
According to a report prepared by the Pakistan Institute of Development Economics (PIDE), Pakistan is among the world’s leading tobacco-consuming countries, with a staggering 24 million active tobacco users. Additionally, a think tank based in Islamabad called Capital Calling has stated in a report that Pakistan has become a breeding ground for multinational cigarette companies.
Cigarette prices in Pakistan are among the cheapest in the region. The think tank has called for the taxation of cigarettes by the guidelines set by the World Health Organization (WHO), which calls for holding cigarette companies accountable for the health and environmental losses they cause. The PIDE report emphasizes that tobacco use is associated with numerous adverse health effects.
Despite this, the tax revenue generated by the tobacco industry causes inertia when it comes to tobacco tax policy in Pakistan and other countries. The report further states that Pakistan’s tax policy is among the weakest action areas in the country’s fight against tobacco.
One possible explanation for this is that policymakers view the tobacco industry as a major contributor to government coffers and are, therefore, reluctant to raise taxes, fearing revenue loss. However, when the government abolished the third tax tier in 2019, which effectively reduced the tobacco industry’s space to sell cheaper cigarettes by avoiding taxes, the tax contribution of the industry increased to 120 billion Pakistani rupees (Rs) in just one year, compared to Rs 92 billion. This raised the tobacco industry’s share of total tax collection to 3 per cent from 2.15 per cent in FY16.
The government’s reluctance to change the tobacco tax policy is partly due to its failure to fully appreciate the smoking-attributable fraction (SAF) of health and social costs. This makes its benefit-cost analysis of tax revenue faulty and compromises health outcomes. The PIDE report states that smoking prevalence in Pakistan is 8.8 percent. Cardiovascular diseases are the most prevalent disease in the country, followed by cancer, especially in urban regions, across both genders and in Punjab and Khyber Pakhtunkhwa (KP) provinces.
The total smoking-attributable fraction of the direct cost of the three diseases is Rs 100.3 billion ($0.63 billion), of which the medical cost is 96 percent (Rs 96.24 billion or US$ 0.60 billion) and the non-medical cost is four percent (Rs. 4.06 billion or US$0.03 billion). The smoking-attributable indirect morbidity cost is Rs 56.32 billion ($0.35 billion), which accounts for 56 percent of the total morbidity cost.
Professor Muhammad Zaman, who teaches Sociology at Quaid-i-Azam University (QAU), emphasized that the hazards of smoking should not be calculated in segments. He urged policymakers to view smoking in its totality and discourage cigarette companies’ tactics of influencing governments worldwide. He hopes that the new government will not fall into the trap of these companies and will fix the loopholes in the tax system to catch the big fish.
