Reducing Tobacco Consumption through Higher Prices: A Study from Pakistan
According to a report by the Pakistani media outlet "Business Recorder" on May 15th, a recent study by the World Health Organization found that despite claims by the tobacco industry, there is not a significant presence of illegal tobacco markets. However, illegal tobacco trade accounts for 23.1% of the total trade volume.
The study points out that the most effective way to reduce tobacco consumption is to increase the price of tobacco products. The world's highest level health organizations emphasize that Pakistan should raise the prices of tobacco products by taxing the tobacco industry heavily. According to the study based on data from the Pakistan Bureau of Statistics, the amount of tax evasion on domestically produced cigarettes in 2015-2016 reached 53.8 billion Pakistani Rupees, of which 38.9 billion Pakistani Rupees, or over 72% of the total, was evaded by legal entities.
The study cited a survey conducted in the federal capital of Islamabad, revealing that Pakistan Tobacco Company (PTC) is one of the largest tobacco companies, with a market share of over 56% in Islamabad, while Philip Morris International (PMI) accounts for over 20% of the market. The research found that the illegal market share is approximately 23%, with 47% being smuggled, 45% being untaxed, and counterfeit cigarettes making up 8% of the illegal market share.
At the same time, anti-tobacco activists are urging the government to increase tobacco taxes to 70% of the retail price, following the guidelines of the World Health Organization to address the alarming rate of tobacco consumption among young people.
The Pakistani leader of the Smoke-Free Child movement, Malik Imran Ahmed, emphasized the urgent need for action and cited the significant impact of tobacco use on public health. "In a country where more than 60% of the population are young people, the government must protect them from the dangers of tobacco use," he said.
He said that this move is expected to generate additional revenue of over 200 billion rupees by the end of the year, and will help offset the medical expenses incurred due to smoking-related diseases. Tobacco consumption causes approximately 160,000 deaths each year, accounting for 1.4% of Pakistan's GDP in healthcare expenditures.
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