Budget 2024-25: More tax 'proposed' on cigarettes

ISLAMABAD: The Pakistan government is considering making cigarettes more expensive in budget 2024-25, ARY News reported, citing sources.

According to details, the National Institute of Health (NIH) has started receiving recommendations from the stakeholders regarding the increase in cigarette rates.

Sources further revealed that NGOs have submitted recommendations to increase 26.6% increase in the Federal Excise Duty (FED) on tobacco.

The Tobacco Control Cell has also finalised its recommendations for making cigarettes more expensive in budget 2025, sources say.

The Ministry of Health will finalize these recommendations and forward them to the Ministry of Finance this week, sources state.

There is a possibility of a 15% to 19% increase in FED on tobacco in the budget 2025, sources knowing the matter said.

Currently, the Pakistan government is levying a FED of Rs120 per cigarette pack, while local industry cigarettes are being sold at 90 rupees per pack.

Multinational cigarette manufacturers paid Rs173 billion in taxes last year and local cigarette manufacturers evaded 240 billion rupees in taxes lat year.

Pakistan faces a significant challenge with widespread tobacco consumption, with over 31.9 million adults aged 15 years and above identified as current tobacco users, constituting nearly 19.7% of the adult population.

Smoking-related illnesses claim over 160,000 lives annually, representing a substantial 1.6% of the nation’s GDP each year. However, in the fiscal year 2022-23, cigarette taxes covered only 16% of these expenses, marking a decline from 19.5% in 2019.