KP government suggests lowering the tobacco tax

To lower the tax ratio, the provincial government proposed a revised Finance Bill in the Khyber Pakhtunkhwa Assembly. Tobacco was once subject to a levy of up to Rs 50 per kilogram from the provincial government.

It was suggested in the Finance Bill amendment that the tax on Virginia tobacco be lowered to Rs 25 per kilogram. Additionally, a proposal has been made to lower the tax on white patta tobacco from Rs 30 to Rs 15 per kilogram.

Additionally, the government of the Pakhtunkhwa Assembly chose to keep the current tariff on Naswar at Rs. 7.50 per kilogram.

The fiscal measure that has been revised also suggests raising the tobacco tax by 10% per year.

A tax increase on tobacco goods, particularly cigarettes, has been demanded by the Finance Ministry of Pakistan in the past by the Society for the Protection of the Rights of the Child (SPARC) and other organizations.

The body announced during a press briefing that they had suggested raising tobacco taxes in the next federal budget by at least 26%.

With almost 31.9 million persons aged 15 and above recognized as current tobacco users, or nearly 19.7% of the adult population, Pakistan faces a serious issue from widespread tobacco consumption.

Every year, smoking-related ailments claim the lives of approximately 160,000 people, accounting for a significant 1.6% of the country’s GDP. Nevertheless, cigarette taxes only paid for 16% of these costs in the fiscal year 2022-2023, down from 19.5% in 2019.