Macroeconomic Impacts of Tobacco Use in Pakistan

Pakistan is among the high-burden countries with respect to the prevalence of tobacco use and its implications for public health. According to GATS (2014), 19.1% of adults in Pakistan used tobacco in any form. Consequently, the prevalence of tobacco-related diseases is also very high and various estimates indicate that tobacco use is associated with more than 100,000 deaths annually in the country. Tobacco taxation is widely considered to be one of the crucial elements of tobacco control, and is being used as a policy measure at the governmental level for tobacco control in Pakistan due to its dual objective of health promotion and revenue generation.

This report discusses the research findings by the Social Policy and Development Centre (SPDC) in Pakistan, where their main objective is to analyse the macroeconomic impacts of tobacco use in Pakistan. Additionally, the research estimates the changes in output, income and employment resulting from changes in tobacco use, and quantifies the impact of such changes on other economic sectors. It also reviews the existing tax structure, tax rates and tax administration mechanisms with regard to tobacco taxation in Pakistan and proposes policy recommendations on tax structure and administration reforms.

Two policy briefs, Tobacco Control in Pakistan: The Impact of Tax Reduction Policy and Role of Tobacco in Pakistan’s Economy: An Untold Reality, were published based on this report.