obacco in Pakistan sits at an intersection of commerce, public health, and national economics, a commodity that generates sizeable profits for manufacturers and excise revenues for the state, yet burdens individuals, families, public health systems, and the broader economy with costs that far outweigh what is gained financially.

The story of tobacco is not simply about sales and taxes; it is about an industry that continually restructures its offerings and its market position to expand revenue, even as the public pays a mounting price in sickness, lost productivity, and suffering.

Every purchase of a cigarette pack or other tobacco product is more than a transaction; it is a transfer of resources from individuals, many of them with limited means, into corporate revenue streams. Tobacco companies, including global affiliates operating in Pakistan, have reported strong growth in turnover and profits as they diversify product lines and penetrate emerging market segments. For example, one major tobacco company posted a remarkable almost Rs 30 billion year-on-year increase in net turnover in 2024, driven by expanded exports and domestic sales alongside emerging smoke-free nicotine products. This reflects how the tobacco industry adapts to shifting consumption patterns and regulatory pressures while safeguarding its revenue base.

It is true that the tobacco sector contributes to the national exchequer. Cigarette manufacturers, through federal excise duties, sales taxes, and other levies, have historically provided a substantial share of government tax revenues from tobacco products. These funds are counted in revenue books and often cited by policymakers as justification for maintaining the status quo in tobacco taxation. But these headline figures conceal a deeper problem: the tobacco industry’s net contribution to public finances is far overshadowed by the health and economic burden that tobacco use imposes on society.

Public-health advocates and researchers from WHO and SPDC estimate that the total national health burden directly attributable to tobacco use has surged in recent years, crossing Rs 1.1 trillion from around Rs 715 billion in 2019. These figures capture direct and indirect costs, from medical treatment and hospital admissions to caregiving expenses and the economic value lost when individuals are too ill to work, or when premature deaths remove earning members from households.

This burden is a crippling drag on health systems already stretched thin and on families who must allocate scarce resources to prolonged care rather than education, nutrition, or investment. The true burden of tobacco is not confined to clinical settings; it wraps itself around every aspect of life where health and productivity matter.

Even independent academic research from Pakistan illustrates how this calculus plays out. A nationally representative study estimated that the economic cost of smoking-attributable diseases and deaths in Pakistan reached roughly Rs 715 billion in 2019, a figure significantly larger than the tax revenue collected from the tobacco industry. That study found that the tax contribution of the tobacco sector was merely about 20 percent of the total economic cost of tobacco use when disease, death, and lost productivity were accounted for. Today, with estimates of the total health burden exceeding Rs 1.1 trillion, the imbalance has only widened.

This is not simple calculus; it is a moral and policy failure. Tobacco users fall ill and spend money on healthcare; families bear the cost of caregiving; productivity hours are lost; and in too many cases, premature death severs both emotional bonds and economic stability. Children grow up without parents or with caregivers whose capacity to earn and invest in the next generation is diminished.

The social and economic consequences ripple outward into communities and the national economy. Tobacco use has been linked to tens of thousands of deaths annually (more than 161,000 as per the Ministry of National Health Services Coordination and Regulation) in Pakistan, underscoring the severity of its human toll.

Beyond taxation and health costs, the industry’s strategic positioning muddies public perception. Tobacco companies champion their role as significant contributors to government revenue, yet this narrative obscures how much of the value chain flows away from public welfare.

While legal manufacturers pay taxes, a growing share of the tobacco market has migrated into unregulated channels, untaxed product flows that escape both health warnings and fiscal capture. This not only erodes the tax base but also undercuts public health goals and cost-recovery through taxation. FBR has been cracking down on these untaxed and “ghost warehouses” recovering billions worth of products.

The result of these overlapping dynamics, industry profit, partial taxation, illicit evasion, and rising health costs, is a pluriversal burden: a burden that manifests in many forms and is shared unevenly by individuals, households, and the state. For tobacco companies, the environment is one of profit opportunity, brand diversification, and new product innovation. For governments, there is a fiscal calculus that must balance revenue generation with health policy commitments. But for individuals and families, the stage is one of loss: loss of health; loss of income; loss of time; and sometimes, loss of life.

Policymakers have at their disposal tools that can realign this calculus. International evidence shows that higher tobacco taxes, when implemented comprehensively and equitably, can reduce consumption while increasing revenue and mitigating the burden of disease. Instruments such as the WHO’s Framework Convention on Tobacco Control and its recommendations on taxation emphasise tobacco taxation as both a health and fiscal tool, not merely a revenue line item. They also stress the importance of addressing tax evasion by the tobacco industry, strengthening enforcement, and investing tobacco tax revenues into health and development priorities.

Yet, Pakistan’s current approach remains fragmented.

Taxation levels, while having been raised in 2023 (and no increase was observed after that), are also structurally flawed and regressive. The two-tiers need to be merged into one, not by lowering the upper tier with the lower one, but by increasing the taxes for the lower tier for up to 35 percent yearly, closing the existing gap.

Cigarette taxes remain below the threshold recommended by health experts, and implementation gaps persist in tobacco control measures, including insufficient consumer education, weak regulatory frameworks, and inadequate enforcement of track and trace system. Until these gaps are addressed, the cycle of profit without accountability and harm without recourse will continue.

Ultimately, the conversation about tobacco in Pakistan cannot be confined to tax revenue statistics or industry profit margins. It must grapple with the full spectrum of consequences that tobacco engenders: economic, social, and human. The industry’s financial success should not be celebrated isolated from the generational debt of disease and loss that it leaves in its wake. A healthier, more equitable society requires a reassessment of how profits are generated; how harms are mitigated; and how the true cost of tobacco is internalised by those who profit most from its sale.

The writer is the head of the Centre for Health Policy and Innovation at the Sustainable Development Policy Institute, Islamabad.