By : Dr. Ziauddin Islam
Taking its nod from Sri Lanka, Pakistan is routing on the way to bankruptcy amidst a
highly charged political atmosphere & economic crunch, the country ever faces.
The total External Debt for Pakistan is 32.74536 US $. Pakistan has sought to increase
in size and duration of its $6bn International Monetary Fund program funding to help
ease difficulties in financing as a new government stepped in. Pakistan also borrowed a
total of $9.2 billion from China, KSA, and UAE.
Earlier Kingdom of Saudi Arabia gave Pakistan $3 billion in foreign currency support
along with a $3 billion facility for deferred payments for oil imports. The current stock of
circular debt hovers around Rs2. 5 trillion ($14 billion). Pakistan also received $3 billion
in economic assistance from the @UAE in December 2018 while all-weather friend
China lent $2.2 billion in March 2019. China is also investing close to $60 billion in
Pakistan under the China Pakistan Economic Corridor (CPEC) of infrastructure and
energy projects.
Tobacco Kills half of its users indicated to the World Health Organization. Tobacco use is
the single largest preventable cause of death in the world killing 8 million people each
year. More than 7 million deaths are due to direct results of tobacco use, while 1.2 million
deaths are due to secondhand smoke. In Pakistan, tobacco is a cause of death for
around 160,100 persons every year. The youth of Pakistan is being targeted by the
tobacco industry so that “replacement smokers” could be recruited. Around 1200
Pakistani children between the age of 6 & 15 start smoking every day.
According to Global Adult Tobacco Survey, in 2014 almost 24 million (19.1%) adults
currently use tobacco in any form. That accounts for 15.6 million (12.4%) adults who
currently smoke tobacco, including 3.7 million adults using water pipes, hookah or shisha,
and another 9.6 million (7.7%) adults who use smokeless tobacco.
Smokers are two to four times more likely than nonsmokers to develop coronary heart
disease. Yet low levels of tobacco exposure, with infrequent smoking or secondhand
smoke, increase the risk of inadequate cardiac health. Male smokers are 23 times more
likely, and female smokers are 13 times more probable than nonsmokers to develop lung
cancer. Smoking causes 80-90 percent of deaths from lung cancer.
According to the Population and Housing Census, 2017, the total population of
Pakistan was 207.77 million, and Population and Housing Census, 2017. Which shows a
significantly high number of youths in the country.
In Pakistan, 1.4 million people get affected by oral cancer every year just due to
cigarettes, urban hukkah / sheesha / electric vapes, gutka, pan, maywa, naswar, and so
on. As per WHO, out of 100 cancer cases, at least 4 cases are of oral cancer in Pakistan.
When we talk about Oral Cancer, the first thing that comes to mind is Smoking. In
Pakistan, where regular food & other consumables have gone up over 60-80 percent on
average in the last five years, the minimum price of a pack of cigarettes, unfortunately,
remained the same.
Tobacco Economics report published by the Institute of Health Research and Policy UIC
stated that due to unchanged and low tobacco taxes, Pakistan ranks among the worstperforming countries in the Tobacconomics Cigarette Tax Scorecard that evaluates the
strength of tax systems, with an overall tax system score of less than one on a five-point
scale.
Cigarettes have become more affordable as tobacco taxes are low and have not
increased since July 2019. The average excise tax rate in Pakistan is currently around
45% of the retail price against the widely accepted benchmark of 70%.In line with the
recommendation of the World Bank, raising federal excise taxes on cigarettes by 30%
would result in 200,000 fewer smokers and an increase of at least 25% in excise tax
revenue.
Therefore, in compliance with the recommendation of the World Bank, raising 30% of the
current FED in Pakistan means; raising tobacco excise to Rs 43 on low-price cigarettes
and Rs 135 on high-price cigarettes would result in 200,000 fewer smokers, 1.2%
reduction in smoking prevalence, 1.23 % reduction in smoking intensity among adults
smokers, 71,900 lives saved, Pak Rs 27.4 Billion in additional total FED revenue—an
increase of at least 25.1%
“The Economic Cost of Tobacco-Induced Diseases in Pakistan,” recently released by
PIDE, uncovers shocking and eye-opening statistics. The total costs attributable to all
smoking-related diseases and deaths in Pakistan for 2019 are Rs 615.07 billion ($3.85
billion). This figure is five times higher than the tobacco tax ever received in Pakistan from
Tobacco Industry. This report further reveals that a” major share (71 percent) of the
smoking-induced costs come from cancer, cardiovascular and respiratory diseases. The
total smoking-attributable costs are 1.6 percent of the GDP, whereas the smokingattributable costs of cancer, cardiovascular and respiratory diseases are 1.15 percent of
the GDP”.
It is no secret that taxes are real means of reducing tobacco consumption. Tobacco use
creates a substantial economic burden on the population at large. Higher direct health
costs linked with tobacco-related disease and higher indirect costs related to premature
loss of life, disability due to tobacco-related illness, and productivity losses create
significant negative externalities of tobacco use.
It is, therefore, an established reality that “increases in tobacco taxes decrease tobacco
use.” Indeed, raising taxes on tobacco is one of the most effective ways to reduce tobacco
use. As reinforced by FCTC that “Effective tobacco taxes not only reduce the
externalities through reduced consumption and prevalence but also contribute to the
reduction of governments’ expenditures for the health care costs associated with tobacco
consumption.”
The government of Pakistan should increase Taxes on cigarettes immediately in line with
FCTC recommendations. This will help the government to control tobacco consumption in
the coming period. This will also help the government to regain lost Tax revenues in the
past few years. This additional revenue will help the government to invest more in the
health sector, Education structure, infrastructure & other consumables prices.
These recommendations are based on technical testimony, best practices, and the
understanding of countries that have efficiently implemented tobacco control policies in
ways that have improved their people’s health. Article 6 of the FCTC obligates member
countries to adopt tax and price policies to reduce tobacco use. Prices affect virtually all
commodities, including measures of cigarette use. This also influences per-capita
consumption, smoking rates, and the number of cigarettes smoked daily.