Tobacco Industry Calls for Stable Tax Policy Ahead of Upcoming Budget
A representative of British American Tobacco has urged the government of Pakistan to avoid increasing taxes on cigarettes in the upcoming 2026–27 federal budget, citing concerns about the growth of the illicit tobacco market.
During a media interaction, Simon Trussler, a senior official at the company, emphasized the need for consistency in tax policy. He stated that frequent or sharp increases in the Federal Excise Duty may unintentionally encourage the expansion of illegal cigarette trade.
According to the company’s perspective, maintaining stable taxation could help support legal sales while discouraging consumers from shifting toward untaxed products. The official noted that a significant portion of cigarette consumption in Pakistan is currently attributed to illicit sources, raising concerns about tax revenue losses.
The Federal Board of Revenue has acknowledged the issue and taken steps to address illegal trade, including enforcement actions and monitoring systems. However, experts suggest that tackling illicit markets requires a coordinated approach combining taxation policy with strong enforcement measures.
Industry representatives also highlighted that large price differences between taxed and untaxed products may influence consumer behavior. They argue that predictable fiscal policies, along with effective market oversight, could help improve compliance and stabilize revenue collection.
At the same time, public health experts continue to emphasize that tobacco taxation plays a key role in reducing smoking rates, indicating that policy decisions often need to balance revenue, enforcement, and health considerations.
