KP govt proposes decrease in tobacco tax

PESHAWAR: The Khyber Pakhtunkhwa (KP) government decided to withdraw the increase in tobacco tax, which was announced in the provincial budget, ARY News reported.

The provincial government presented an amended Finance Bill in the Khyber Pakhtunkhwa Assembly to decrease the tax ratio. Initially, the provincial government imposed a tax of up to Rs 50 per kilogram on tobacco.

In the amended Finance Bill, it was proposed to reduce the tax to Rs 25 per kilogram for Virginia tobacco. The tax on white patta tobacco has also been proposed Rs 15 per kilogram from Rs 30.

The Pakhtunkhwa Assembly government also decided to maintain the existing tax of Rs 7.50 per kilogram on Naswar.

The amended finance bill also proposes an annual increase of 10 percent in the tax on tobacco.

Read More: Further tax on tobacco products proposed

Earlier, the Society for the Protection of the Rights of the Child (SPARC) along with other organisations has demanded the Pakistan’s Finance Ministry to increase tax on tobacco products, especially cigarettes.

In a briefing session with journalists, the body noted that they have proposed to increase tobacco taxation by at least 26 per cent in upcoming federal budget.

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.