LAHORE – Illicit tobacco industry is causing an annual revenue loss of Rs240 billion to the national exchequer besides posing a threat to public health by providing cheap cigarettes to the low-income population.
Though the government is continuing the practice of enhancing taxes on cigarettes for more revenue generation, it is not giving due attention to the real menace of smuggling and illegal tobacco trade in the country.
Instead of urging the government and authorities to holistic approach, anti-tobacco organizations are only advocating a tax increase which is actually applied only on existing tax paying companies.
“With over 50 per cent of the market already flooded by illegal cheap cigarettes, any increase in tax rates on the legal sector only amplifies the appeal of cheaper illicit alternatives, especially for the economically disadvantaged population,” said Osama Siddiqui, a microeconomics analyst.
He said that the concerning aspect is that such a move not only fails to address the core problem but also disproportionately affects the low-income segment, already vulnerable to economic hardships and lacking adequate access to healthcare facilities.
“By perpetuating a focus solely on increased taxation, these organizations disregard the holistic solutions needed to combat smoking addiction effectively”, he said while adding that Instead of advocating for tax hikes, these organizations could channel their energies into pressing the government to take stringent action against illicit tobacco manufacturers.
Mr Osama said that bringing these entities under the vigilance of a comprehensive track and trace system could significantly curb the illicit trade, mitigating enormous revenue losses and simultaneously safeguarding public health.
