Pakistan declines owing to higher taxes, awareness

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ISLAMABAD, April 25 (dna): A study has witnessed major decline in retail volume sales of cigarettes in Pakistan due to higher taxes and awareness amongst cigarette consumers of the potential health risks caused due to smoking.

The Euro monitor report has revealed the retail volume sales decreased by 1% in 2022, resulting in the sale of 60 billion sticks annually, the sale was set to decrease by 2% over the forecast period to 55 billion sticks.

Pakistan Tobacco Company was the leading player in 2022, with a retail volume share of 71% in the market, the report added.

Euro monitor further said that following the ban on advertising tobacco products in Pakistan, and in the wake of the COVID-19 experience, there is an increasing awareness among consumers of the potential health risks of smoking tobacco actively and passively, individually or in any social setting.

Pakistan’s commitment to the Framework Convention on Tobacco Control (FCTC) underscores the importance of a unified pricing system for cigarettes to regulate the industry effectively and discourage consumption.

The WHO advocates for robust tax measures to reduce tobacco consumption, citing the effectiveness of a 10% increase in tobacco prices typically leads to a 4% decrease in overall tobacco consumption in high-income countries and up to an 8% decrease in low- and middle-income countries.

A study by the Pakistan Institute of Development Economics (PIDE) highlights the dire consequences of smoking-related diseases and deaths, with costs amounting to Rs615.07 billion in 2019, equivalent to 1.6% of the GDP.

Meanwhile, the International Monitory Fund (IMF) has recently, init study, suggested applying a single-tier tax structure on all international and national cigarette brands. Currently, cigarettes were taxed in two tiers, which was not only resulting a low collection of taxation from the cigarette industry but also resulting in 337000 deaths annually in Pakistan.

The objective of IMF recommendations was to ensure equitable taxation across cigarette products and it was widely appreciated by health advocates.