Karachi, June 8, 2025 — As the countdown to Budget 2025-26 intensifies, foreign tobacco players have launched a high-stakes pressure campaign on Pakistan, demanding the government roll back tax rates on deadly tobacco products — a move that could spell disaster for public health and national finances alike.
Reports are swirling that Pakistan was initially poised to hike the federal excise duty (FED) on tobacco, aligning with urgent recommendations from the World Health Organization (WHO). However, in a shocking twist, insiders now reveal that the government may be caving to foreign lobbying, revising tobacco tax structures in favor of powerful cigarette manufacturers just days ahead of the June 10 budget announcement.
This comes despite WHO’s dramatic wake-up call to Pakistan, warning of an escalating health catastrophe driven by widespread tobacco addiction. According to WHO data, tobacco kills 164,000 people annually in Pakistan, while bleeding the economy of a staggering PKR 700 billion (approx. US$2.5 billion) every year. “This is not just a public health issue — it’s a national emergency,” said WHO Representative Dr. Dapeng Luo. “Tobacco is a merciless killer, destroying families, overwhelming hospitals, and devouring futures.”
At a recent seminar hosted by the Sustainable Development Policy Institute (SDPI), health experts and economists condemned Pakistan’s two-tiered tobacco tax system for enabling industry manipulation. They exposed how companies preemptively increase prices to soften the blow of new taxes and exploit regulatory loopholes in products like Naswar and nicotine pouches. The SDPI called for a unified, long-term taxation model covering all tobacco products to align with WHO’s FCTC and MPOWER standards — a framework Pakistan has committed to but rarely enforces.
Yet, in stark contrast, the Overseas Investors Chamber of Commerce and Industry (OICCI) — representing foreign corporations in Pakistan — has publicly called for a tax “rationalization.” Their proposal? Keep premium FED rates untouched, but slash value-tier rates by 25%, from PKR 5,050 to PKR 3,800 per 1,000 cigarettes — a move critics say prioritizes profits over lives.
As budget day approaches, the nation watches anxiously. Will Pakistan stand firm for public health — or fold under the weight of tobacco industry pressure?