Budget Proposal for 2025 Increased Tax on Cigarettes Suggested
ISLAMABAD: The Pakistan government is contemplating raising cigarette prices in the budget for 2025,
According to reports, the National Institute of Health (NIH) has initiated consultations with stakeholders regarding the potential hike in cigarette prices. NGOs have also proposed a significant 26.6% increase in the Federal Excise Duty (FED) on tobacco.
Sources further revealed that the Tobacco Control Cell has finalized its recommendations for increasing cigarette prices in the budget for 2025.
The Ministry of Health is expected to formalize these recommendations and present them to the Ministry of Finance this week.
Insiders familiar with the matter suggest the likelihood of a 15% to 19% hike in FED on tobacco in the budget for 2025.
Presently, the Pakistan government imposes an FED of Rs120 per cigarette pack, while domestically produced cigarettes are sold at Rs90 per pack.
Last year, multinational cigarette manufacturers contributed Rs173 billion in taxes, while local cigarette manufacturers avoided Rs240 billion in taxes.
Pakistan grapples with a significant challenge posed by widespread tobacco consumption, with over 31.9 million adults aged 15 years and above identified as current tobacco users, accounting for 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, cigarette taxes covered only 16% of these expenses in the fiscal year 2022-23, down from 19.5% in 2019.
Smoking-related illnesses claim over 160,000 lives annually, representing a substantial 1.6% of the nation’s GDP each year. However, cigarette taxes covered only 16% of these expenses in the fiscal year 2022-23, down from 19.5% in 2019.
