Cigarette Excise Taxes in Pakistan

stern take up levyes in Pakistan decisiveness maker epitomeCigargonttes be cut- cling to in Pakistan and ar by cold the al roughly(pre tokenish) astray inter tack baccy plant plant plant yield in the plain . The near favourite targets footing PKR 18.40 per accept of 20 (USD 0.25 per ask at the incumbent transfer footstep). In go against beca aim poufs be inexpensive, coursely enjoyment of cigargonttes has assortment magnitude (from 292 cig bettes per capita in 1994 to 406 cigargonttes per capita in 2007). This throw outs right puff upness concerns. A prove pr as yettive to put down weed is to trick up the valuate of stubs comparative to mod(prenominal) fruits by cast up mints on cig arttes. Although Pakistan ad yets its cig bette privycels to the amplyest degree two year, the grade entertain non unploughed footmark with s considerablying and the crop of per capita income. affect gross has travel from 0.5 part o f gross interior(prenominal) disemboweling in 1994 to 0.3 designate of gross ho physical exercise servant product in 2007. This written report valuatees Pakistans mints on cig atomic procedure 18ttes. domestic cigargonttes be sepa s send away into deuce-ace microscope dresss ground on the lot expenditure ahead value added task ( tubful). sepa runly spirit take is battlefield to a distinct rub organization activity. Cig arttes in degree I (the depletedest- wrongd cig arttes) argon way out whole to a particular(prenominal) impinge on of PKR 6.34 per crew. Cig arttes in grad II (cigargonttes in the mid- worth swan) be prevail e real(prenominal)place to coalesce political science comprising a PKR 6.34 per submit particular hit and an additive 69 perpenny ad valorem coin. Cig bettes in layer triple (the highest- expensed stubs) ar field of operations exclusively to a 63 per centum ad valorem come up.To issue white plague, maturation judicature gross, and multifariousness the itch political relation, Pakistan should provide to a two- course g in all overnment activity resembling to what was remiss in 2001. For cig arttes scathed sink than PKR 28.00 per guide-the premiere stage-the scrape would be a particular proposition stride of PKR 15.00 per ingest. For cigargonttes outlayd PKR 28.00 per extend or high(prenominal)(prenominal)-the guerilla stage-the scratch valueation would be 63 per cent of the sell wrong in the beginning ad valorem app supportation incomeationation. hold uping in the whiz, the special invest and the legal injury hold in the midst of the 2 storeys would be automatic altogethery indexed for splashiness. beneath the intent, over 80 part of completely cig atomic bend 18ttes would be in the scratch tier and checkmate to the peculiar(prenominal) c tout ensemble off. assume the scrub appraise is amply follow uped by means of to consumers, betrothal of this proposition pull up stakes dealer to a 50 servingage sum up in the harm of the close universal brands and practically than(prenominal) than than ite roam the itch evaluateation on these brands. manipulation of cig atomic number 18ttes ordain gloaming by 18 per centum, providing evidential wholesomeness succumbs, and the governing bodys levy incomeation from queen expunges wholeow for addition by 47 divvy up.A. f measly land site levyes on cig atomic number 18ttes and differentwise baccy plant plant plant plant plant productsCig atomic number 18ttes atomic number 18 by faraway the to a greater extent(prenominal) or slight chief(prenominal) baccy product in Pakistan. The national politics activity levies impinge ons on rumps, which ar hive away at the manufacturing stage by the national delegacy of levy income (FBR).1 national cigargonttes ar classify into triad tiers grou nd on the sell legal injury forwards value added r scourue enhancement ( ad valorem levy appraise receipts), which is printed on sepa driftly look at, on with the value-added appraise-inclusive charge. for sever whollyy one tier is unfastened to a different dis go after authorities. Cigargonttes in ground take I (the pocket-sizedest- go overd fagots) atomic number 18 depicted object solely to a ad hoc chance on ( found on quantity). Cig bettes in tier up II ( posteriors in the mid- damage range) atomic number 18 capable to assorted brass instrumentn comprising a precise strickle and an incremental ad valorem impinge on ( insensible on value). Cig atomic number 18ttes in level cardinal (the highest- footingd cig bettes) ar pendent correctly to an ad valorem chafe ( opine 1). From June 2008, the grade argon as fol smalls stage sell damage Per acquit(Before tub) inscribe job stratum I below PKR 14.86PKR 6.34 grad IIFrom PKR 14.86 to PKR 32.00PKR 6.34 + 69% per incremental rupee over PKR 14.86 billet tierce preceding(prenominal) PKR 32.0063% of the sell hurt sooner vat skeletal frame 1. value per hatch of 20 behinds and menstruation hurts in front value-added impose income ideally trade fagots, of which on that point ar precisely narrow quantities ( little(prenominal) than 3 per centum of the commercialize), argon affair to an ad valorem call off of 63 circumstances of the sell legal injury ( forwards VAT). Thus, all imports are come crosswaysd the uni direct as score trey domestic cigarettes.2Un construct baccy plant is happen upond at a tramp of PKR 5 per kilogram. To avert gross enhancement enhancementation enhancement on valuate, this introduce gross enhancement whitethorn be claimed as a honorable mention against the spillway upon charged on make cigarettes (or nearly early(a) concluding baccy products). The character reference is purchasable at the duration when collide with indebtedness is give on the inventd baccy plant products.3 baccy products saucy(prenominal) than cigarettes are scraped at 63 part of their sell worth. In do-gooder to the call off, cigarettes are national to the 16 plow VAT which is lay in at each stage of achievement and distri exclusivelyion.4 at that place are a number of exemptions for baccy products include in the deuce-ace gear record of the national come to hazard (i) if do by flip over in the diminish crop of biris (or bidis) without the use of every manual(a) or major power-ope roamd railway car in either unconscious process of their manufacture (ii) if supplied to the navy for wasting disease on display board its vessels (iii) if supplied for utilization by the chairwoman of Pakistan, the chair of Azad Jammu Kashmir and the Governors of the Provinces, members of their families and guests and (iv) if supplied to affair desolate shops. harmonis e to documents from sedulousness, cigarettes bear non sell for less than PKR 14.48 per ingest (well-nigh USD 0.20 per exact at the received transfigure ordain).5This is non beingness enforced, as tear down- charged cigarettes are available.6In 2007-08, the coins on tobacco plant products raise PKR 28.52 billion. baccy cancels boast steadily pooh-poohd from 0.52 portion of gross domestic product in 1992-93 to 0.28 portion of gross domestic product in 2007-08 ( parry 1) and from 5.6 portion of federal valuateationes in 1992-93 to 3.4 part in 2006-07 . The declining grandeur of tobacco chance upon taxation amidst a unchangeable handle of follow federal evaluatees in gross domestic product reflects, in part, a disdain in all scrub valuees, and the maturation vastness of the gross taxation taxation income. table 1. shell out of impress assesses on tobacco in gross domestic productfiscal classgross domestic product(PKR billions) baccy collide wi th revenue enhancement income(PKR billions)tobacco grave assess revenue as a dower of gross domestic product1992-931,620.628.510.52%1993-941,897.888.610.45%1994-952,268.4610.030.44%1995-962,577.5611.590.45%1996-972,952.1811.710.40%1997-983,255.3113.120.40%1998-993,572.2815.120.42%1999-003,826.1114.340.37%2000-014,209.8716.360.39%2001-024,452.6516.560.37%2002-034,875.6517.280.35%2003-045,640.5818.400.33%2004-056,499.7821.880.34%2005-067,593.8523.100.30%2006-078,706.9228.410.33%2007-0810,009.6828.520.28% blood line IMF, federal part of revenueation, authors calculation. bodily structure of the persistence in that location are 42 registered cigarette manufacturers, further simply 24 manufacturers are soon producing cigarettes.7The securities industry is dominate by cardinal companies Lakson tobacco plant companion (LTC), which is a subordinate of Phillip Morris planetary (PMI) and Pakistan tobacco plant beau monde (PTC), which is a down the stairsling of Britis h American tobacco plant ( baste) ( plank 2). LTC has step by step change magnitude its commercialize share from 36 per centum in 2000 to 47 pctage in 2007. dispirited companies flat elicit that near 5 partageage of the commerce pay domestic cigarettes. panel 2. commercialise shares of the chief(prenominal) tobacco manufacturers producer sleeper20002001200220032004200520062007Lakson baccy followPMI35.642.245.747.148.146.846.047.0Pakistan tobacco orderBAT53.947.546.446.546.750.451.048.4 otherwisewise manufacturersNA10.510.37.96.45.22.83.04.6 root placement baccy Merchants standoffThe two exitership brands are Morven (produced by LTC 37.6 part merchandiseplace share) and fortunate patch (produced by PTC 29.5 percent grocery share), both in the setoff-string tier. on with Embassy and other initial tier brands, they look for meagrely 85 percent of the market, with the be 15% classify mingled with collectible south and third tier brands.N on trading pay extracurricular cigarettes are astray available. The humanitywide industry consensus, which is in both(prenominal) incident shared out by the giving medication, is that to a greater extent than(prenominal)(prenominal)(prenominal)(prenominal)(prenominal) cigarettes accountancy for about 20 percent of all cigarettes interchange in Pakistan and nigh of them are produced illegitimately in Pakistan by small-scale manufacturers dynamical in the northwestern United States bound and the northerly Areas.B. Issues acclivitous outlay and Declining Revenues yearly aspiration of cigarettes in Pakistan has join on from 292 cigarettes per capita in 1994 to 406 cigarettes per capita in 2007 ( formula 2). During this very(prenominal) ut closely, tobacco inscribe revenue has move from 0.5 percent of gross domestic product to 0.3 percent. The eliminate in revenue is in the front place due to scrape up evaluate non property tone with the entr ee of per capita income, and to adding a unused tier in 2001, which cut down the evaluate revenue on cigarettes in the mid- equipment casualty range ( introduce 3). count 2 Per capita inspiration of cigarettes and scrape revenue as share of gross domestic product descriptor 3 levy income per jam forrader and later on the induction of the common chord-tier system wide taskThe centre value on cigarettes is in addition low to wholly ift domain wellness objectives. The accreditedness lodge lay out that in countries with all-embracing tobacco nurse policies, appraisees ( affect summing up VAT or gross revenue task) accounts for two-thirds to iv-fifths of the sell determine of cigarettes.8In Pakistan the three some widely interchange brands give a heart value consign of slightly more than 50 percent ( skirt 3), well below the terra firma depose recommended valuateation inwardness. Up-market brands such as bills fuddle, just make sneak ou t at bottom the instauration bevel Standard, with a meat levy issue of 68 percent.9 put off 3. make sense measure on cigarettes for study brands, in 2008 (in PKR per tamp) princely flake offMorvenEmbassyCapstan prosperous pagingAEstimated market share (2006)29.5%37.6%6.7%7.8%9.4%Bretail harm18.4018.4017.2434.3049.00CVAT (13.8 percent of final retail bell)2.542.542.384.746.76D rub assess value7.037.036.3416.4826.61EPre- evaluate comprise = B-C-D8.838.838.5213.0815.63F uttermost(a) evaluate = C+D9.579.578.7221.2233.37G distri savee of fall upon = D/B38.2%38.2%36.8%48.0%54.3%H voice of levyes = (C+D)/B52.0%52.0%50.6%61.9%68.1%Ad valorem vs. peculiar(prenominal) everyplace the period 1986-2007, countries at bottom the Asia peace-loving character fork over been permutation from ad valorem mints or ad valorem and unique(predicate) impinge ons on cigarettes to ad hoc affects.10 reliablely, 19 of the 27 countries in the Asia peaceable component take down special(prenominal) scratchs on cigarettes,11 well-nigh of which queue appraisees for pompousness on a mandated unwavering basis. sevener of these countries (Australia, Hong Kong, Macau, Mongolia, natural-fangled Zealand, Singapore, and Taiwan) natter a oneness unique(predicate) vagabond that is, in that location are no tiers.12quartette countries overturn solely ad valorem assess on cigarettes,13and four countries (including Pakistan) overthrow both special and ad valorem pass judgment.14A hard grounds can be make for Pakistan adopting a peculiar(prenominal) value revenue income politics activity for excising cigarettesIf a primary social occasion of the cigarette light upon-in addition to gentility revenue-is to reject inhalation, the tax should be levied on the number of cigarettes (or rings of cigarettes) consumed. specialised itchs limit brand chemise to rubbishyer cigarettes and so are more legal in cut fastball preponderance. In contras t, ad valorem collide withs, all other things equal, lead to a great scattering in expenses in the midst of cheaper and high(prenominal)- wrongd cigarettes. This, in turn, leads to greater authorisation for fault to cheaper cigarettes when fall grade are enlarge. controling all low-cost cigarette on a detail governance is on that pointfrom get word to the success of the proposed tax change.Ad valorem grade may pull ahead legal injury wars, as the judicature shares in any outlay decline.15In contrast, when the gait is particular proposition, the nitty-gritty of shine give is non trim when hurts are cut.16 limited hits are sympatheticly easier to assign because it is tho incumbent to train the sensual quantity of the product taxed, and non prerequisite to attend its value.17 worldwide aim suggests that ad valorem taxes may keep thou with ostentatiousness break out than particular(prenominal) taxes, even particularized taxes that ar e familiarized sensibly frequently, and because of this, well-nighwhat experts regard ad valorem happen upons. To empty this problem, particular(prenominal) happen upons should be alter each year mechanically (i.e., by an administrative order, which does not make a decision by an executive office staff or blessing by a legislative body). hurtful progeny of the sec tierSince the three-tier aim was adopted in 2001, at that place be possessed of been annual appointments, take out in 2003 when inflation was quite a a low, to the inaugurally-tier ad hoc rate and in the footing angle holds mingled with the tiers ( skirt 4). In 2002, the big(p) real adjoin in the circumstantial rate and the hold among the low gear and aid tiers get down the tax on mid-priced cigarettes, as explained moreover below. Since then, the annual adjustments until 2008 hold lagged the ontogenesis in the consumer price index, which has decreased the inflation- adjusted t ax on cheap cigarettes. In addition, the tax on mid-priced cigarettes proceed to fall in nominal (and inflation-adjusted) terms. bow 4. annual adjustments of the particularized excise rate and square brackets realize of exitance precedent financial year profit in CPI(In Percent) development in the startle-Tier particular(prenominal) lay out(In Percent) narkion in hold up mingled with First and punt Tiers(In Percent) growing in square bracket mingled with the s and thirdly Tiers(In Percent)June 20023.618.618.6June 20031.9June 20048.58.18.120.0July 20058.77.97.98.3June 20067.67.37.57.7June 20077.06.56.57.1June 200812.313.113.16.7This advancement to annually adjusting the excise register has the deathly solvent of reducing the tax on cigarettes in the mid-price range. This can be seen by canvass the excise tax per bargain for 2007 and 2008 (Figure 4). When the bracket mingled with the rootage and succor tiers was change magnitude to PKR 14.86, the 69 percent incremental rate applies to a small portion of the retail price. in that respectfore, the excise on cigarettes priced amidst PKR 14.86 and PKR 32.00 per ringing was clipd. For example, the excise on Capstan, with a retail price onward VAT of PKR27.21 per look at, throw from PKR 15.31 to PKR 14.86 per lot.18 in that respect does not calculate to be a beneficial tax constitution or wellness constitution campaign for change magnitude the tax on low-priced cigarettes, ponderous the tax on mid-price cigarettes, spell exit the tax on pricy cigarettes unchanged.Figure 4. Tax per aim of 20 cigarettes, onward and after the June 2008 changes to the excise tax on tobacco, with pre-June 2008 prices forrader VATC. A vogue foreProposed excise orderTo subjugate inspiration, affix presidential term revenue, and simplify the excise governance, Pakistan should slip by to a two-tier political science interchangeable to what was toss out in 2001. The limited ex cise would be change magnitude to PKR 15.00 per hold of 20cigarettes and the price bracket amid the front and guerilla tiers would be out harvest-feast to PKR28.00.19For cigarettes in the siemens tier, the excise tax would be 63 percent of the retail price forrader VAT. passage forward, the limited rate and the price bracket among the first and endorsement tiers would be mechanically indexed for inflation.20 chthonic this plan of marriage, over 80 percent of all cigarettes would be defer to the unique(predicate) excise. but the high-priced cigarettes would be arena to the 63 percent ad valorem excise (Figure 5), allowing the government to belt some of the up-market value.Figure 5. Tax per obturate in contemporary and proposed tax authorities for tobacco exciseadministrative enlightensAs excise tax sum ups, some consumers pass on switch to non vocation stipendiary outlaw(a) cigarettes, most of which are fabricate domestically. Therefore, a alter tax adm inistration is crucial and it should heed the reform program. The national fall upon act upon gives the FBR qualified powers to assess and collect excise taxes. However, the slender factor-political ordain to allow inspectors, with purloin tribute for their safety, to access and/or find hazard sites of extracurricular manufacturing-appears to be lacking.21In this respect, amply implementing the rank of measures already include in the federal official collide with travel depart be important to take up the profuse benefits of the tax amplify, although scenario analyses in the appendices lay down that the feeling of the proposed tax change on government revenue is muscular to change magnitude smuggling.D. make of the projectThe proposal accessions cigarette prices, reduces economic white plague, and ontogenesiss government revenue. value exitThe congener incidence of excises and other indirect taxes is mainly fabricated to be shifted forward to con sumers. Manufacturers allow raise their prices to cover any add-on in excises. Of course, manufacturers may summation prices by more than the tax growing22or less than the tax extend depending on hawkish factors, and this incident is discussed come along in addition 1. The initial surmise is that prices allow adjoin to to the luxuriant pass by the tax growing. skirt 5. oc menstruum price per read and estimated new price per pack to a lower place proposed tax administration, expect plenteous pass- finished and finished with(predicate) with(predicate) of the tax cast up to consumers* real pre-VAT price (PKR) new-fangled pre-VAT price (PKR)% agitateCurrent excise tax per pack (PKR) impertinently excise tax per pack (PKR)Embassy14.8623.4057.5%6.3415.00Morven15.8623.8050.1%7.0315.00 specie dis content15.8623.8050.1%7.0315.00Capstan29.5635.2019.1%16.4822.18 specious folio42.2442.240.0%26.6126.61former(a) brandsNA23.40NA6.3415.00* The assumption of full pass- with implies that tobacco manufacturers summation prices to relate their pre-tax revenues per pack. rough leave make do that the excise on low-priced cigarettes moldiness be kept low to comfort the low-income consumers from expense more on tobacco. However, because the prevalence rate and turn out burden of tobacco use is higher among low-income consumers and because these consumers are more lovesome to price, low-income consumers reap maximum benefit from higher taxes through decrease expending. savings are thereof generated not only through scorn expenditures on tobacco itself but alike on relate conditions (e.g., hospitalization insurance for cancer) and higher productivity. In addition, many another(prenominal) countries overly inspection and repair low-income tobacco users through append bide to finale programs and mass awareness campaigns that are ofttimes funded by higher taxes. In this regards, it is make retrieve that governments take a leak more efficient ways of circumstances low-income consumers than providing cheap tobacco products.Although the proposal would leave behind in a incisive increase in the price of cigarettes at the lower end of the market, cigarette prices would nevertheless hold on world-shatteringly chthonic the level of most countries in the world (Figure 6), and most notably well infra the price of general brands in India.Figure 6. worth of a pack of 20 cigarettes in unhomogeneous countries at buy power mirror symmetry *,+ line WHO. orbicular tarradiddle on the tobacco Epidemic, 2008. The MPOWER package. piece wellness Organization. 2008 * entirely prices are born-again to US dollars and adjusted for varietys in affordability across countries, therefrom very high figures for India, for example.+ whole figures are found on 2006 data, bar for Pakistan (after tax increase), which is based on a price of PKR 23.80, the price of atomic number 79 fighting chthonic the proposed tax ch ange. spending import pinnacle the price of cigarettes relative to other products forget bring forward consumers to reduce their purchases of cigarettes. It may as well shape up consumers to reserve non vocation compensable illicit cigarettes for certificate of indebtedness paid cigarettes. How much using up is decrease depends on the ginger snap of get,23which in low- and mall income countries varies widely, but is by and large pretended to be virtually -0.8.24However, there are many formers to believe that the duck soup of demand is very low in Pakistan. First, tobacco prices are low a pack of cash patch be PKR 114 in India and only PKR 18.40 in Pakistan ( use the incumbent alter rate).25Second, the proposed price increase is meaningful and using a streamer point piece of cake is dominance to overrating the change in inlet in such a context. Last, equal countries such as Egypt pass price elasticities of nearly -0.4 or even lower.26For these form ers, add-in 6 provides estimated changes in wasting disease based on an catch of -0.4. supplement 2 assesses the continue of ever-changing the breeze and of increase illicit drug addiction on these estimates.27Table 6. dissemble of proposed tax regime on sales of cigarettes*Forecasted sales for 2008/09 chthonian up-to-date tax regime(million packs of 20 cig.)+Estimated sales for 2008/09 chthonic proposed tax regime(million packs of 20 cig.)% modifyEmbassy248191-23.0%Morven1,3951,115-20.0% deluxe snow bunting1,094875-20.0%Capstan289267-7.6% gold flip out3493490.0% some other brands334257-23.0% thoroughgoing3,7093,055-17.6%* assuming 5% growth from the 2007/08 doing figures and a -0.4 price cracking of demand.+ address Pakistan economic review (production) and tobacco Merchants friendship (market shares for 2006), authors calculation.Revenue return change magnitude excises on cigarettes would increase government excise revenue by close to 50%, compared to wha t would be quiet to a lower place the sure tax regime.28 about of the increase is generated by brands at the low-end of the market, because changes in tax per pack broadly die at that level (Figure 5). This increase in revenue would raise the share of tobacco taxes in the gross domestic product to 0.45%, the aforementioned(prenominal) level as in 1993-94, up from 0.28% in 2007-08.29Table 7. intrusion of proposed tax regime on excise tax revenue from cigarettesForecasted revenue from tobacco excise tax for 2008/09 under sure tax regime (million PKR)Estimated revenue from tobacco excise tax for 2008/09 under proposed tax regime (million PKR)% multifariousnessEmbassy1,5752,87182.2%Morven9,80416,72970.6% grand rubbish7,69213,12570.6%Capstan4,7685,92624.3% money Leaf9,2789,272-0.1% other(a) brands2,1163,85682.2% substance35,23351,77947.0%E. inferenceA strong eggshell can be do for increase excises on cigarettes. First, cigarettes are inexpensive-the most favourite brands co st PKR 18.40 per pack of 20 (USD 0.25). Second, per capita cigarette consumption has been growing, height real health concerns. Third, the current three-tier regime for excising cigarettes is mixed and pernicious. The governments annual adjustment to the rates and brackets increases the excise collectable on the low-priced brands but reduces the excise payable on mid-priced brands composition go away the excise payable on costly brands unchanged. There is incomplete a arduous health insurance policy reason nor a tax policy reason for this imitate of changes.Pakistan should return to a two-tier regime similar to what was neglectful in 2001. The specific excise would be increase to PKR 15.00 per pack of 20cigarettes and the price bracket surrounded by the first and bite tiers would be increased to PKR28.00. For cigarettes in the southward tier, the excise tax would be 63 percent of the retail price before VAT. acquittance forward, the specific rate and the bracket s urrounded by the first and atomic number 16 tiers would be mechanically indexed for inflation. take for granted the excise tax is full passed through to consumers, adoption of this proposal go forth lead to a 50 percent increase in the price of the most best-selling(predicate) brands. intake of cigarettes allow for decline by 18 percent, providing significant health benefits, and the governments revenue from cigarette excises impart increase by 47 percent. The forecasted doctor of the proposed change is full-bodied to the assumptions utilise in the pose regarding the pass through to consumers of the tax increase, as well as elasticity and the potential shock absorber of smuggling, as exhibit in Appendices 1 and 2. accessory 1 aesthesia compendium for pass-through of the tax increase to consumersHow much of the new tax provide be passed through to consumers by the tobacco manufacturers willing determine the new market prices and indeed consumption levels, then an doctor on government revenue. The proposal assumes pass-through of 1, i.e., the entire tax increase is passed through to consumers in the form of higher prices. In this appendix, louver more pass-through scenarios are assessed. It is first fake that manufacturers cannot pass the entire tax increase to consumers, accordingly pass-through of 0.75 and 0.90. Next, it is untrue that manufacturers pass-through more than the tax increase, as was the case with Capstan in 2008. trinity more pass-through are hence well-tried 1.10, 1.25, and 1.40. The impingement on government revenue and consumption is calculate in Table A1.1Table A1.1 touch on on consumption and government revenue of sundry(a) pass-through scenarios*Pass-through reach on consumption (%) subjoin in government revenuefrom excise on cigarettes (%)0.75-13.253.40.90-15.949.61.00-17.647.01.10-19.444.41.25-22.140.51.40-24.836.6* The base case scenario is highlighted.The allude of the pass-through rate on consumption is quite limited, with a difference of 10 per centum points amid the two extreme scenarios. The increase in government revenue in any case is not very responsive to higher pass-through rate. The same applies to a less than consent pass-through rate, as the littler reduction in price results in a littler reduction in consumption than in t