SPDC, SPARC call for increase in cigarette taxes in next federal budget

ISLAMABAD, Apr 02 (APP):The Social Policy and Development Centre (SPDC) in collaboration with Society for the Protection of the Rights of the Child (SPARC) launched the “Pakistan Tobacco Fact Sheet” to highlight the cigarette taxes contribution for Federal Budget 2026-27 to protect public health and strengthen fiscal outcomes.

Presenting the key findings, Muhammad Asif Iqbal, Managing Director of SPDC, highlighted that tobacco use remained a major public health crisis in Pakistan, causing over 192,000 deaths annually. He noted that the economic health burden of smoking related diseases was estimated at Rs 1,835 billion in 2024-25, far exceeding the Rs 266 billion collected in tobacco taxes.

“Pakistan continues to have some of the lowest cigarette prices in the region, largely due to stagnant tax rates and declining real taxation,” he said.

Iqbal further stated that Federal Excise Duty (FED) rates on cigarettes have not increased since February 2023, resulting in reduced tax share in retail prices and increased affordability, particularly of low cost brands. SPDC recommended increasing FED by Rs 35 per pack on economy brands and Rs 21 on premium brands, alongside a gradual move toward a unified tax tier structure, he added.

Speaking on the occasion Nelson Azeem, Parliamentary Secretary of the Ministry of National Health Services Regulations and Coordination (NHSR&C), stressed the serious consequences of tobacco use on public health and its widespread impact on society.

“The health of our future generations is at stake, and this is a challenge we cannot afford to overlook,” he stated. “The repercussions of inaction are severe, not just in terms of health, but also in terms of the economic and social costs involved”, he added.

Sharing his remarks at the event, Dr Shazia Sobia Aslam Soomro, Member National Assembly, stressed upon the importance of tobacco taxation as a public health measure. She highlighted that stronger fiscal policies could play a critical role in reducing preventable diseases and easing pressure on Pakistan’s healthcare system.

“Increasing tobacco taxes is not just a revenue measure; it is a vital investment in the health and future of our population,” she stated.

Mohammad Riaz Fatyana, Member National Assembly, strongly urged the government to make this tax increase a priority in the 2026-27 budget. He emphasized that raising the FED on cigarettes would not only support economic growth but would also save lives by reducing tobacco use. By implementing this measure, Pakistan could take a significant step towards a healthier and more prosperous future, he said.

Dr. Khalil Ahmad, Program Manager of SPARC, emphasized upon the alarming rise in tobacco use among youth, noting that lower priced cigarettes disproportionately attract young and low income smokers. “Higher taxes are one of the most effective tools to reduce youth initiation. Global evidence shows that price increases significantly discourage smoking among young people,” he said.

According to SPDC estimates, the proposed FED tax increase can generate an additional Rs 51 billion in revenue, prevent 369,000 youth from initiating smoking, and 271,000 fewer smokers.

The speakers also urged that recent price hike in oil prices due to the overall regional situation has severely impacted the general public and overall economy, adding, it would be more beneficial to focus on increasing the cigarette taxation measures instead of increasing the prices other basic necessity items.

They called on policymakers to take concrete steps in the next fiscal budget to ensure tobacco’s taxation and supports public health goals.