Daily Times

The budget 2019 has been tough on many fronts especially on the new taxes imposed on previously “unknown” items from the informal economy. One such item is Naswar, which is also commonly known as snuff of snus in the Western world. Naswar, like smokeless tobacco, is excessively used throughout Pakistan as a cheap alternative to smoking tobacco. As per one estimate, out of a total of almost 300 million users, 85 per cent of the smokeless tobacco users live in South Asia (Pakistan, India and Bangladesh). Official data by the Tobacco Control Cell at the Ministry of Health claims that almost 10 million Pakistanis use smokeless tobacco.

The alarming and unfortunate part of smokeless tobacco use is the fact that it is enjoyed by Pakistanis, regardless of age, gender and regional segregations. In a Global Youth Tobacco Survey (GYTS) conducted in Pakistan, involving over 8723 youth (5832 were between the ages of 13-15 years), it was concluded that 5.3 per cent Pakistani youth used smokeless tobacco.

A study titled, “Oral cavity cancer in developed and in developing countries: population-based incidence,” claimed that Pakistan had one of the highest incidence rates of oral cancer in the world. Similarly, the International Agency for Research on Cancer claimed oral cancer was one of the most common cancers among men and the second most common cancer among women in Pakistan.

Naswar usage in Pakistan also fosters on the informality of the economic environment. From the purchase of (cheap) raw tobacco to manufacturing facilities in small households, from non-standardised packing to absence of all health standards necessary during and post-manufacturing, make it the cheapest sold intoxicant in the market. Adding on the ease of access on every small kiosk at street corners ripens the recipe for unregulated and effortless distribution of a pinch of carcinogens.

Despite a plethora of scientific evidence, which links smokeless tobacco, such as Naswar, to the oral and other forms of cancer. Any efforts to infringe on the existing pricing, taxation or package standardisation in smokeless tobacco regime is greeted with the tough critique and obstinate resistance.

The social and cultural attachment of Naswar with its users makes it a taboo.

Factors such as traditional relevance, misconceptions about Naswar being less harmful as compared to cigarettes, superstitious assertions that it can cure a toothache, affordability, availability, ease of manufacturing, sectoral and economic informality, and absence of worthwhile legislation, complicate the issue to the level of the dilemma for development and implementation of any worthwhile policy.

Post-2019 Budget, there has been a lot of hue and cry on social, electronic and print media, against the increased taxes on Naswar. It has also been dubbed as a governmental onslaught on this “cheap and traditional intoxicant”, affordable by a poor person. In this vein, it is important to segregate the fact from fiction.

Naswar usage in Pakistan fosters on the informality of the economic environment

The maximum increase in Flue-Cured Virginia (FCV) tobacco has been Rs. 0.42 per kg. This tobacco is used by cigarette manufacturers and is considered better quality tobacco. Moving down the price ladder, one can notice a marginal price increase in the Naswar/Snuff of only Rs. 0.20 per kg.

The question arises why is there so much of noisy media coverage showing poor people on the roadside expressing their anger against the brutality of new taxes on an intoxicant? The answer probably rests in the interest groups, Tobacco Industry and Naswar manufacturers, who are instrumental in the creation and spread of the campaign among masses to resent the taxation. The recommendations made for an increase in tobacco-related taxes was Rs. 10.00 per pack of cigarettes and a marginal increase for Rs. 0.50 per kg on smokeless tobacco. Unfortunately, the tobacco growers and social/electronic media campaign drivers have clamoured the issue.

A 2017 study titled “Oral cancer via the bargain bin: The risk of oral cancer associated with a smokeless tobacco product (Naswar)” claimed that women had a higher risk of oral cancer as compared to men using Naswar. The average size of the Naswar package was calculated to be 43.6 grams, serving the consumer almost 21 pallets/pinches per pack. The existing package cost ranges between Rs 8/- to Rs 10/- (averaging to Rs. 9/- per pack). If this statistics is taken as a baseline, one kg product purchased by the manufacturer for Rs 76.50, is sold as 23 packages, for almost Rs 207/- per kg. This amounts to Rs 130.5 per kg profit.

Taking low manufacturing cost and mass production, the profit for this microeconomic activity is almost Rs 100/- per kg. As per tobacco control board, almost four million kgs of air-cured tobacco (used for Naswar) was produced during 2017-2018; making it an industry with Rs four billion per year profit.

To reiterate, there is a minimal to zero tax paid by the manufacturers and vendors, which explains the reasons for such excessive resistance on a small increase in the Cess and allied taxes in budget 2019. If the Naswar manufacturers have passed even one rupee price increase to its customers, it is looking at increasing its profit by millions and getting away with throwing the entire blame on the governmental tax regime.

There is a need for the government to take serious notice of this industry. As a first step, the package standardisation needs to be regulated. The next steps could include the possibility of bringing it under the tax umbrella and printing of health warning on the package. Masses are generally unaware of the ill-effects of this intoxicant and consider it a safe option and also as an alternative to cigarettes during the quitting phase. However, one fact is forgotten during the process that the tobacco industry manufactures products designed to kill half of its users prematurely. Certainly, the point to ponder is why any business would do this to its customers, without looking at or expecting ever-increasing profitability through the new and younger clientele.

The writer works at the Sustainable Development Policy Institute (SDPI)