Why doesn't the Pakistan government tax cigarettes and other addictive goods?

[Major]

Petrol prices in Pakistan have received another rise in the price. Though main reason for this was the depreciation of the rupee, but one of the other reason was to increase govt revenue collection.

I think last year the price for petrol was at 72, now its 84 rupees.

If Govt has taken a hard stance on revenue collection, then why not start fro cigarettes?

Atleast that would be justifiable. I dont understand why the necessity goods have to face inflation, while goods with negative externalities are sold cheap.

Also, if Alcahol consumption was to be made legal but heavily tax, would this affect the prices of other needs in the country, if good enough revenue is generated from alcahol for the govt?

 

[Slog]

what makes you think cigarettes arent taxed?
They are!

 

[R3verse Swing]

In UK, cigarettes and alcohol are tax to the max. In fact almost every year the tax goes up. Great earner for the Treasury but doesn't lower levels addiction.

 

[Slog]

it is correct though that last year the tax on tobacco products was slashed significantly

 

[Major]

£8.74 is the price of cigarette in UK
£0.88 is the price of cigarette in Pakistan

in UK, i think, 70% of the price is taxation

 

[Major]

In UK, cigarettes and alcohol are tax to the max. In fact almost every year the tax goes up. Great earner for the Treasury but doesn't lower levels addiction.

thats my question. WHy not generate revenue from it? Those are addictive goods. You are bound to generate revenue from it

 

[TM Riddle]

£8.74 is the price of cigarette in UK
£0.88 is the price of cigarette in Pakistan

in UK, i think, 70% of the price is taxation

In Delhi it's £ 0.176

 

[WhenSultansBowled]

OP you should watch this movie: Thank you for smoking

 

[Cpt. Rishwat]

thats my question. WHy not generate revenue from it? Those are addictive goods. You are bound to generate revenue from it

Seems very odd that addictive substances are taxed far more heavily in the UK than in Pakistan considering Pakistan is supposedly the Islamic country. Obviously alcohol is prohibited so you can't tax that, but tobacco should be an obvious target. But then Pakistan's tax system is hard to figure out anyway, seems it's not enforced with any consistency anyway.

 

[mmkextreme_1]

Feel like there are some kickbacks involved somewhere with Pakistans politicians being involved.

 

[Major]

Seems very odd that addictive substances are taxed far more heavily in the UK than in Pakistan considering Pakistan is supposedly the Islamic country. Obviously alcohol is prohibited so you can't tax that, but tobacco should be an obvious target. But then Pakistan's tax system is hard to figure out anyway, seems it's not enforced with any consistency anyway.

The Islamic country is just to appease others.

I have friends and know people who could easily obtain alachol inside the country.

Alcohol has created such a large shadow economy inside Pakistan, which makes me fail to understand why not legalize it and generate revenue from it.

This is why I hate the appeasing factor. Just to appease the jahil molvis and so called Muslims the economy miss out.and. Because of the movlis and the so callled Muslims other people have to suffer because the tax burden is shifted on other necessaity goods.

Illegal alcohol is very easy to access.

High taxes are being imposed on the wrong places.

Chalo even if you want to impose high taxes, why not start from cigs and alcohol...

 

[DeadBall]

The Islamic country is just to appease others.

I have friends and know people who could easily obtain alachol inside the country.

Alcohol has created such a large shadow economy inside Pakistan, which makes me fail to understand why not legalize it and generate revenue from it.

This is why I hate the appeasing factor. Just to appease the jahil molvis and so called Muslims the economy miss out.and. Because of the movlis and the so callled Muslims other people have to suffer because the tax burden is shifted on other necessaity goods.

Illegal alcohol is very easy to access.

High taxes are being imposed on the wrong places.

Chalo even if you want to impose high taxes, why not start from cigs and alcohol...

There are Alcohol stores in most regions in Karachi. The one I used to frequent in Gulistan - e - Jauhar was in between the Bata store and an ice cream shop. It was on the main road and there the counters were mostly full during the opening hours. Hell, they even delivered at home if you didn't want to be seen going in.

The hard liquor was alright for a locally made product but the Muree beer was something else. Even now in Germany, the land of beers I could not find one that can match it.

 

[Major]

There are Alcohol stores in most regions in Karachi. The one I used to frequent in Gulistan - e - Jauhar was in between the Bata store and an ice cream shop. It was on the main road and there the counters were mostly full during the opening hours. Hell, they even delivered at home if you didn't want to be seen going in.

The hard liquor was alright for a locally made product but the Muree beer was something else. Even now in Germany, the land of beers I could not find one that can match it.

I'm assuming these operate with the permit style bull crap? Which is then further sold to other consumers who are willing to pay high price?

 

[DeadBall]

The funny thing was it was closed during Ramadan (technically) but was the first thing to open and be totally crowded the whole night after the sighting of the moon.

 

[Madplayer]

If they are heavily taxed, will it result in smuggling?

 

[DeadBall]

I'm assuming these operate with the permit style bull crap? Which is then further sold to other consumers who are willing to pay high price?

Hmm don't know the workings but the prices were somewhat so

200-250 rupees for a local brandy/whisky/gin/vodka 250 ml
800 rupees for local brandy/whisky/gin/vodka 750 ml
1800 rupees best quality local whisky/brandy/gin/vodka 750 ml
200 rupees 500 ml Muree beer bottle
120 rupees 250 ml can other beers

Plus 30 rupees for home delivery.

 

[Gabbar Singh]

In UK, cigarettes and alcohol are tax to the max. In fact almost every year the tax goes up. Great earner for the Treasury but doesn't lower levels addiction.

It’s great for the government because not only is there the obvious financial benefit (taxes of almost £10bn minus costs to the NHS of around £5bn) but also because so many smokers die prematurely the state also saves on pensions and elderly care costs.

That said the smoking numbers have gone down in the UK in recent years. Is that down to the rising costs? Well it can’t really be proven one way or the other but I’m sure it’s one of the factors.

 

[DeadBall]

Cigarettes, I used to smoke Dunhill was 55 rupees per packet which rose to 80 last time I was there.

In Germany it was around 5 Euro a few years ago and now is 6.20.

In Dubai when I started smoking it was 3.5 Dirhams for Marlboro but has risen to 12 Dirhams last time I checked.

 

[DeadBall]

Alcohol in the UAE, unless you bought at MMI but that required a permit and the booze was expensive and just too much of a hassle. We, the local population (and expats) just used to buy the tax free Alcohol at the duty free ports of Ajman and Umm Al Quwain which was the same price as the Airport Duty Free however you had a limit of just buying 2 bottles. However here even with the taxes I pay a similar if not a lesser amount.

 

[R3verse Swing]

It’s great for the government because not only is there the obvious financial benefit (taxes of almost £10bn minus costs to the NHS of around £5bn) but also because so many smokers die prematurely the state also saves on pensions and elderly care costs.

That said the smoking numbers have gone down in the UK in recent years. Is that down to the rising costs? Well it can’t really be proven one way or the other but I’m sure it’s one of the factors.

Not sure if e-cigarretes come under smokers? I know quite a few have switched to e-cigarettes. Won't be long before government taxes e-cigarettes either.

 

[Major]

If they are heavily taxed, will it result in smuggling?

Not really.
Tax is imposed at businesses directly. Once tax is imposed on them, thy transfer the tax burden on to the consumer by taxing the product.

Smuggling happens if the company itself sells in black like it happens now adays

 

[Major]

The funny thing was it was closed during Ramadan (technically) but was the first thing to open and be totally crowded the whole night after the sighting of the moon.

Thus proving my point that it's demand does exist.

The economy could achieve alot by taxing it.

I think prostitution is legal in Bangladesh. I wonder if that has a positive impact on the economy

 

[Major]

It’s great for the government because not only is there the obvious financial benefit (taxes of almost £10bn minus costs to the NHS of around £5bn) but also because so many smokers die prematurely the state also saves on pensions and elderly care costs.

That said the smoking numbers have gone down in the UK in recent years. Is that down to the rising costs? Well it can’t really be proven one way or the other but I’m sure it’s one of the factors.

Another advantage of taxing smokes

 

[Madplayer]

Not really.
Tax is imposed at businesses directly. Once tax is imposed on them, thy transfer the tax burden on to the consumer by taxing the product.

Smuggling happens if the company itself sells in black like it happens now adays

I mean cant the criminals buy it at cheaper prices from neighbouring countries and smuggle it in to Pakistan and sell it in black at cheaper prices than what the Pakistani government allows?
Or have i been watching too many bollywood flicks?

 

[Major]

I mean cant the criminals buy it at cheaper prices from neighbouring countries and smuggle it in to Pakistan and sell it in black at cheaper prices than what the Pakistani government allows?
Or have i been watching too many bollywood flicks?

foreign smuggling already takes place in Pakistan.

But once it is legal, my assumption is that it will operate just like how cigs operate in UK.

smuggled Alcahol as of yet is quite pricey.