Publications

Pakistan has aggressively pursued fiscal consolidation through various tax hikes, yet tobacco taxation has been notably excluded from these efforts. Despite prevailing fiscal pressures and critical public health concerns, the Federal Excise Duty (FED) on cigarettes has been frozen for the third consecutive year, including in the Finance Bill 2026. Because high inflation has severely eroded the rea ..

This paper calls for recalibrating the 7th NFC Award, which still relies on outdated census data and pre‑merger boundaries. Using the 2023 Digital Census, 2024–25 poverty estimates, and updated revenue figures, it proposes an Updated Baseline that refreshes indicators while retaining the original formula. Positioned as an interim measure until the 11th NFC Award, the framework ensures fairness ..

The Tobacco Factsheet presents a forward-looking cigarette tax proposal for FY2026–27, designed to advance public health while reinforcing fiscal stability. It highlights how a unified excise structure can curb smoking prevalence, generate sustainable revenue, and align with the country’s commitments to domestic resource mobilization. ..

Illicit cigarette trade undermines both fiscal revenues and public health objectives. This study provides the first systematic estimate of revenue losses attributable to tax evasion and smuggling, revealing how weak enforcement and market distortions drain government resources. It calls for evidence-based reforms to strengthen excise administration, close loopholes, and counter industry narratives ..

Official estimates based on the HIES 2024-25 place Pakistan’s poverty incidence at 28.9%. In contrast, SPDC’s analysis reveals a far higher rate of 43.5%, driven by methodological refinements and highlighting a disproportionate rise in urban poverty. This policy brief summarizes the findings from SPDC’s report entitled Empirical Evidence of Upsurge in the Poverty Numbers: Pakistan, 2025 Scen ..

This policy brief challenges industry-driven narratives on illicit cigarette trade in Pakistan by presenting evidence-based estimates of its actual scale. It demonstrates that exaggerated claims have distorted policy debates, while rigorous survey data reveal a more moderate but still significant illicit market. By grounding estimates in consumption-weighted data, the study reveals a more accurate ..

The Tobacco Fact Sheet 2025 brings together the latest evidence on prevalence, consumption patterns, excise revenues, and health costs of tobacco use. It highlights how tobacco taxation can serve as a dual-purpose policy - curbing smoking rates while strengthening fiscal stability. Designed for policymakers, researchers, and advocates, the factsheet provides a clear snapshot of the scale of tobacc ..

Pakistan’s commitment to the SDGs remains constrained by weak institutional capacity, fragmented governance, and limited fiscal space. This policy brief provides a critical assessment of where the country stands in 2025, revealing persistent shortfalls in poverty reduction, health outcomes, education access, and climate adaptation, despite policy pledges. By situating Pakistan’s trajectory aga ..

This policy brief presents consumption‑weighted estimates that reveal a more moderate yet significant scale of illicit trade. By grounding analysis in nationally representative survey data, it highlights enforcement capacity and not tax levels as the key determinant, offering policymakers a clearer path to fiscal reform. ..

The Finance Act 2024 raised the federal excise duty on cigarettes, shifting the tax structure toward higher specific rates. This has implications for affordability of low‑tier brands, consumption trends among youth, and the expected revenue gains. The analysis cautions that any rollback of these measures would undermine both fiscal stability and public health, stressing the importance of sustain ..

The February 2023 cigarette tax hike produced a clear behavioural response: overall consumption fell by nearly one‑fifth, while many smokers shifted from premium to cheaper brands. This research brief analyzes survey evidence showing reduced smoking intensity, substitution patterns, and the fiscal and health implications of the reform. ..

The Federal Budget 2024–25 outlines strategies to stabilize the economy while addressing social sector needs. This brief reviews key measures: higher allocations for debt servicing and defense, modest increases in health and education spending, and limited fiscal space for development programs. It highlights the trade‑offs between fiscal consolidation and inclusive growth, underscoring the nee ..

The Tobacco Fact Sheet compiles the latest evidence on smoking prevalence, excise revenues, and health costs in Pakistan. It shows that 19.9% of adults - around 31.6 million people - use tobacco, while smoking‑related deaths exceed 90 per 100,000 annually. The factsheet highlights how excise reforms can reduce consumption, prevent youth initiation, and strengthen fiscal stability. ..

The Federal Budget 2023–24 was presented amid stagflation, political uncertainty, and a looming transition of government. This brief analyzes contradictions between contractionary monetary policy and expansionary fiscal measures, highlighting risks of wage‑price inflation, rising poverty, and unsustainable deficits. It calls for disciplined fiscal management, targeted subsidies, and stronger c ..

In FY2023–24, Federal Excise Duty (FED) on cigarettes was increased to curb consumption and strengthen revenues. The tobacco industry has countered with claims that higher taxes reduce production of duty‑paid cigarettes, erode profitability, and fuel illicit trade. This policy brief presents evidence showing that, despite lower production volumes, the reform is expected to generate higher reve ..

The recent increase in Federal Excise Duty (FED) on cigarettes marks a decisive step toward reducing tobacco consumption and mobilizing domestic revenue. This brief presents evidence that the reform has already curbed smoking prevalence and strengthened fiscal outcomes. It emphasizes that sustaining and institutionalizing this policy is critical to prevent reversals, protect public health, and sec ..

This SPDC brief underscores the enormous potential of taxation to discourage smoking, reduce prevalence, and raise revenues. Survey evidence shows Pakistan’s cigarette market is highly concentrated, with six brands consumed by over 80% of smokers and three firms controlling 88% of sales. Price changes strongly influence behaviour: past hikes reduced consumption and prompted quit attempts, while ..

The Finance Act 2022 and subsequent Tax Law (Amendment) Ordinance raised FED on cigarettes by 24.5%. This fact sheet shows the reform’s dual impact: a projected 4.7% decline in consumption, PKR 25.2 billion in additional revenue, and over 400,000 smokers quitting alongside 435,000 youth discouraged from initiation. Despite progress, Pakistan’s excise share in retail price remains below the 70% ..

The Finance Act 2022 raised FED on cigarettes by an average of 12.5%, but the increase fell short of the recommended 30% benchmark. SPDC’s analysis shows that despite higher rates, producer price hikes reduced the excise share in retail price from 45.9% to 40.9%, leaving cigarettes more affordable than two years ago. The reform is expected to cut consumption by 4.5%, generate PKR 13.5 billion in ..

Tobacco use remains a major public health and economic challenge in Pakistan, with 31 million adults consuming tobacco and over 163,000 deaths attributed to smoking in 2017. The economic burden reached PKR 615 billion in 2019, disproportionately affecting poor households. This SPD policy note uses predictive modeling to assess the impact of excise tax increases introduced in the Finance Act 2022, ..

The Finance Bill 2022 raised FED on cigarettes by 7.7% for premium brands and 12.1% for low‑tier brands - breaking a three‑year stagnation in tax rates. While this adjustment is a welcome step, it remains far below the recommended 30% benchmark. SPDC’s analysis shows that the increase will modestly reduce consumption, generate additional revenue, and encourage quit attempts, but cigarettes w ..

In Pakistan, domestically produced cigarettes are subject to two major indirect taxes – the Federal Excise Duty (FED) and the General Sales Tax (GST). The FED accounts for almost 80% of the revenue from the sector. Both taxes are collected at the production stage. The cigarette manufacturing sector in Pakistan is an example of an imperfect market, with only three companies dominating domestic pr ..

Raising Tobacco Tax Rates to Promote Public Health and Increase Revenue: Policy Options for Budget 2022-23 ..

The prevalence of tobacco use continues to remain one of the critical development challenges in Pakistan as about 30 million adults—19.1 percent of the adult population—currently use tobacco in any form. Tobacco use is estimated to be associated with premature deaths of over 160,000 people in Pakistan in 2017.2 Cigarette taxation is an essential element of tobacco control policy in the country ..

Pakistan is a signatory to the WHO Framework Convention on Tobacco Control (FCTC), which requires the country to implement taxation and pricing policies on tobacco products to reduce their consumption. Effective tobacco taxation is considered the most effective means of reducing tobacco consumption and generating revenues for public health promotion. However, tobacco tax policies in Pakistan have ..

Pakistan is a high tobacco-burden country where more than 29 million adults currently use tobacco in any form. Estimates based on Pakistan’s Household Integrated Economic Survey (HIES) 2018–19 indicate that tobacco is consumed in more than 45% of the households in the country — the ratio is 49% and 38% in poor and rich households, respectively. ..

Global evidence has established that tobacco use is a leading cause of deaths due to non-communicable diseases (NCDs), including cancers, chronic respiratory diseases, and cardiovascular diseases.1 Pakistan is not an exception to this situation: it has a high burden of tobacco use with resulting high costs from tobacco-related morbidity and mortality. With a prevalence rate of 19.1 percent, about ..

Social Policy and Development Centre (SPDC) is undertaking a series of informed and interactive dialogues, on various topics covering a range of the drivers of violent extremism (VE) in Pakistan. The aim of the project is to increase understanding of violent extremism related issues among government representatives and different stakeholders, besides increasing the capacity of civil society to org ..

Increasing the price of tobacco products through higher taxation is widely acknowledged as the most effective way to reduce tobacco consumption. Although evidence shows that tobacco taxation does not have a significant impact on the illicit trade of cigarettes1, a common argument of the cigarette industry in Pakistan is that higher taxes drive illicit trade. The industry claims that smokers seek o ..

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Social Policy and Development Centre (SPDC) is undertaking a series of informed and interactive dialogues, on various topics covering a range of the drivers of violent extremism (VE) in Pakistan. The aim of the project is to increase understanding of violent extremism related issues among government representatives and different stakeholders, besides increasing the capacity of civil society to org ..

Social Policy and Development Centre (SPDC) is undertaking a series of informed and interactive dialogues, on various topics covering a range of the drivers of violent extremism (VE) in Pakistan. The aim of the project is to increase understanding of violent extremism related issues among government representatives and different stakeholders, besides increasing the capacity of civil society to org ..

Tobacco taxation is widely acknowledged as a robust policy instrument to scale back tobacco consumption. Effective and optimal tobacco taxation can serve the dual objective of public health promotion and revenue generation. The effectiveness of this tool, however, depends heavily on the mechanisms of tax collection. Read more... ..

Pakistan has a chequered history in terms of taxation on cigarettes. The Federal Excise Duty (FED) is the major tax levied on cigarettes in the country and its structure is based on a price-tier system. In 2013, a two-tier structure of FED based on the range of retail prices was introduced. In 2017, FED structure was modified to a three-tier structure, with a new tier for the low-price brands, in ..

Role of Tobacco in Pakistan's Economy: An untold Reality ..

A Reflection on the State of Economy and Federal Budget 2018-19 ..

Agenda for Devolved Tax Collection ..

Fiscal Implications of 7th NFC Award ..

Empowering Local Government – The Road to Inclusive and Sustainable Development ..

Tobacco Control in Pakistan: The Impact of Tax Reduction Policy ..

A Reflection on the State of Economy and Federal Budget 2017-18 ..

Key Issues in the State of Economy ..

Agenda for the 8th NFC: Lessons from the 7th NFC Award, Post- 7th NFC Development and Emerging Issues ..

The Privatization Program ..

Women at Work ..

Social Impact of the Security Crisis ..

The Elimination of Textile Quotas and Pakistan-EU Trade, Policy Brief, April 2007 ..

The report is an effort to objectively present the situation with respect to the state of the economy. It acknowledges the gains made over the year, but cautions against certain misleading and, consequently, overly optimistic judgements. It identifies the areas where weaknesses are pronounced and where policy shifts are called for in order for the process of economic revival to be generated and su ..

On the Estimation of An Absolute Poverty Line: An Empirical Appraisal ..

A National Poverty Reduction Strategy and the Role of Donors ..

Macroeconomic Framework for Debt Management ..

Revamping the SAP ..

Statement to the Commonwealth Delegation ..

Unsustainability of the Balance of Payments ..

Broad-Basing of GST: The Strategy for Transition ..

Provincial Resource Mobilisation ..

Financial Sustainability of NGOs: Proposal for 1998-99 Federal Budget ..

Political Economy of Tax Reforms: The Pakistan Experience ..

Ninth Five Year Plan (1998-2003): Issues Paper ..

Implication of the TOR of the New NFC ..

Provincial Budgets of 1995-96 ..

Fiscal Effort by Provincial Governments in Pakistan ..

Switchover to Ad Valorem Octroi Rates at Dry Ports ..

Rationalisation of Octroi Rates ..

User Charges in Health ..

Sindh Government Budget of 1993-94 ..

User Charges in Education ..

Sales Taxation of Services by Provincial Governments ..

Rationalisation of Stamp Duties on Financial Assets and Transactions ..