Saturday, June 22, 2024

Cigarette Price Hike Fuels Illicit Trade, Undermines Public Health Efforts in Pakistan

Despite the government’s efforts to reduce tobacco consumption by raising cigarette prices, a recent study has found that these measures are not having the intended effect. Instead of smoking less, many people are switching to cheaper, tax-evaded cigarette brands, which undermines public health initiatives and decreases government revenue.

The study revealed that 89% of respondents did not decrease their cigarette consumption despite the price hike. Out of these, 80% opted for cheaper brands. Additionally, 71% of Pakistanis recently changed their cigarette brand, with a staggering 67% shifting to illegal, tax-evaded brands due to their lower prices, while only 33% continued to consume tax-paid cigarettes.

This study, titled “The Impact of Cigarette Price Increase on Smoking Behavior & Patterns,” was conducted by Umeed-e-Sehar, an organization dedicated to promoting public health initiatives and improving community well-being across Pakistan. The research combined quantitative analysis and qualitative insights from a sample of 1,698 smokers out of a total sample size of 2,000 individuals. Additionally, the study surveyed 60 retail shops in cities such as Mardan, Hyderabad, Multan, Faisalabad, Sahiwal, and Gujranwala.

The study disclosed that the 154% increase in federal excise duty on cigarettes, intended to make them unaffordable for consumers, has not produced the desired results. Instead of discouraging smoking, higher taxes have pushed smokers to switch from expensive, tax-paid brands to readily available, cheaper alternatives. This outcome is the opposite of what the government intended.

According to the study, 87% of retailers confirmed an increased demand for cheaper, non-tax-paid cigarettes following the price hike. Furthermore, 83.5% of retailers reported the absence of tax stamps on cigarette packs, indicating widespread tax evasion.

The increase in federal excise duty has caused significant variations in the price distribution of cigarette brands. As a result, a majority of respondents now prefer cheaper, illicit cigarette brands. Specifically, 62.4% of respondents reported using brands priced between 80 and 120 rupees

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