The Pakistani government is considering increasing cigarette prices in the 2024-25 budget.
The National Institute of Health (NIH) has started receiving recommendations from stakeholders regarding this potential price hike.
Sources revealed that NGOs have submitted proposals to increase the Federal Excise Duty (FED) on tobacco by 26.6%.
The Ministry of Health will finalize these recommendations and forward them to the Ministry of Finance this week.
Sources familiar with the matter said a 15% to 19% increase in FED on tobacco is possible in the 2025 budget.
Currently, the Pakistan government levies a FED of Rs120 per cigarette pack, while local industry cigarettes are sold at Rs90 per pack.
Multinational cigarette manufacturers paid Rs173 billion in taxes last year, while local manufacturers evaded Rs240 billion in taxes.
Pakistan faces a significant challenge with widespread tobacco consumption, with over 31.9 million adults aged 15 and above identified as current tobacco users, nearly 19.7% of the adult population.
Smoking-related illnesses claim over 160,000 lives annually, costing the nation 1.6% of its GDP each year. However, in the fiscal year 2022-23, cigarette taxes covered only 16% of these expenses, down from 19.5% in 2019.
