WHO Recommends Pakistan Raise Federal Excise Duty on Cigarettes Upward

The World Health Organisation has formally recommended that Pakistan adjust its Federal Excise Duty on cigarettes upward, arguing that the current duty structure falls below thresholds required to meaningfully deter tobacco consumption, particularly among price-sensitive lower-income consumers and youth. The recommendation was made in the context of Pakistan's upcoming budget deliberations.

WHO's position is grounded in extensive global evidence showing that tobacco tax increases are among the most cost-effective public health interventions available to governments. Pakistan's current effective tax burden on cigarettes, when measured as a proportion of retail price, remains below the WHO-recommended benchmark of 75 percent of retail price.

The organisation's recommendation has been endorsed by public health groups and anti-tobacco coalitions in Pakistan, who have long argued that inadequate taxation has allowed cigarette affordability to remain stable despite broad inflationary pressures, undermining cessation incentives.

The tobacco industry, however, has consistently argued that sharp duty increases accelerate the shift toward cheaper illicit cigarettes, reducing revenue outcomes. The government will need to balance health policy objectives against fiscal modelling of licit market contraction risk.