SPARC urges higher cigarette taxes in FY2026-27 budget, saying tobacco use imposes a massive economic and public health burden on Pakistan
Pakistan spends nearly seven times more on treating tobacco-related illnesses than it generates in tobacco tax revenues, underscoring the substantial economic and public health costs associated with smoking, according to the Society for the Protection of the Rights of the Child.
Dr Khalil Ahmad, Programme Manager at SPARC, said the country is facing a growing tobacco challenge, with an estimated 31 million adults using tobacco products.
According to SPARC, tobacco-related diseases cause more than 192,000 deaths annually in Pakistan, equivalent to approximately 526 deaths each day. The majority of these deaths are linked to cardiovascular diseases, cancer and other smoking-related health conditions.
The organisation estimated the annual economic cost of tobacco consumption at Rs1,835 billion, or around 1.6% of Pakistan’s gross domestic product (GDP).
In comparison, the government collects approximately Rs266 billion in tobacco tax revenue annually, highlighting what SPARC described as a significant net economic loss for the country.
Ahead of the federal budget for FY2026-27, SPARC has called on the government to increase the Federal Excise Duty (FED) on cigarettes as part of broader efforts to reduce tobacco consumption and improve public health outcomes.
The organisation proposed raising FED by Rs35 per pack on low-priced cigarette brands and by Rs21 per pack on premium brands, while gradually moving towards a uniform taxation structure.
According to SPARC’s analysis, the proposed measures could generate an additional Rs51 billion in government revenue.
The organisation also estimated that higher cigarette taxes could prevent approximately 370,000 young people from starting smoking and encourage nearly 270,000 existing smokers to quit or reduce tobacco consumption.
Dr Ahmad noted that cigarette taxes have remained unchanged since February 2023 despite rising inflation and higher fuel costs. As a result, cigarettes have become relatively more affordable in real terms, particularly lower-priced brands.
SPARC said stronger tobacco taxation policies, aligned with the World Health Organization Framework Convention on Tobacco Control and MPOWER strategy, could help reduce smoking prevalence while supporting government revenue collection.
Public health experts have long argued that tobacco taxation remains one of the most effective tools for reducing smoking rates, particularly among young people and low-income groups.
