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The Government of Pakistan is reportedly facing mounting pressure from the tobacco industry to concede to demands that could potentially reverse years of progress in tobacco control.Cigarette manufacturers have ramped up lobbying efforts in recent weeks, seeking sweeping tax relaxations.
Among the most concerning proposals is the introduction of a third-tier category of ultra-low-cost cigarette brands — a move seen by public health experts as a deliberate strategy to flood the market with cheaper tobacco products.
The industry is pushing for a drastic cut in the current federal excise duty from PKR 5,050 to PKR 2,525 per 1,000 sticks for this new tier.
In addition, manufacturers are reportedly lobbying for a reduction in taxes on existing cigarette brands from PKR 5,050 to PKR 3,800 per 1,000 sticks — a step that would substantially lower retail prices, make cigarettes more accessible, and potentially increase the number of smokers across the country.
“The industry’s focus, for now, appears to be more on reducing taxes across the board rather than introducing the third tier immediately,” said one source familiar with the ongoing lobbying.
“Tobacco sector stakeholders are using a mix of lobbying and manipulative tactics to push their proposals forward, and bringing them to the attention of the International Monetary Fund (IMF).”
Public health advocates have raised alarms that if such proposals are approved — particularly with IMF endorsement — it could cast serious doubts over the Fund’s commitment to Pakistan’s long-term health goals.Commenting on the issue, Asif Iqbal, Managing Director at the Social Policy and Development Centre (SPDC), warned of grave consequences.
“Pakistan has around 31 million adult tobacco users, including 17.3 million cigarette smokers. Tobacco use claims over 160,000 lives annually while draining 1.6% of the country’s GDP,” he said.
“If the government, with IMF approval, agrees to these regressive tax cuts, it would likely increase smoking prevalence, escalate the national death toll, and substantially raise healthcare spending. The ultimate burden will fall on the national exchequer,” Iqbal cautioned.
Signals from policy circles suggest that the IMF may be warming up to the government’s tax proposals—a move that could be interpreted as implicit alignment with tobacco industry interests.
If the Fund permits any leeway, industry profits may surge by PKR 10 to 20 billion annually, but this financial gain would come at the steep cost of a disproportionate rise in Pakistan’s health burden—potentially ten times the projected revenue.