Since 2017 there has been no net increase in taxation while the health cost has increased up to 615 billion or 1.6 % of the GDP, according to a report by the PIDE.
Pakistan’s health care system is insufficient, ineffective, and expensive. The poor conditions in the health sector may be attributed to several factors like poverty, malnutrition, unequal access to health facilities, the inadequate allocation for health, and high population growth and infant mortality.
According to the Economic Survey of Pakistan (2005-06), the government spent 0.75 percent of GDP on the health sector to make its population healthier and stronger. According to the PCHR report, tobacco use cost the economy Rs 192 billion due to healthcare costs for tobacco-related diseases and lost productivity. Worldwide, governments impose taxes on tobacco products. Particularly for Pakistan, taxes must be increased to balance the health deficit, the report said. Also, excise taxes are most important for attaining the health objective of reduced tobacco consumption, it added.
By imposing tobacco taxes, the government can generate sufficient funds to invest in the health sector. Smoking is the leading root of escapable deaths worldwide. The use of tobacco causes 8 million deaths globally each year, with almost 80% of the smokers living in low- and middle-income countries, spending most of their income on tobacco products (WHO Report).
In Pakistan yearly, 166,000 people die due to tobacco consumption. Government must initiate measures to ensure the implementation of all relevant laws to enhance tax on cigarettes to boost its revenue and reduce health costs. Already health is the neglected sector in Pakistan. Generation of revenue, reallocation of resources, and reformulation of the health strategy that target to benefit the deprived groups more and improve the overall health structure is the desired need of the time. Through better health policy with an emphasis on the implication, side can make a huge difference in the living standards of the poor. Increasing taxes on tobacco can save lives and would generate income, the report concluded.
