Daily Times

The Federal Board of Revenue (FBR) has proposed a health tax on a pack of cigarettes.

A health tax of Rs. 10 on cigarettes has long been advocated by the anti-tobacco lobby to discourage smoking among the youth. Approval was granted for the tax by the cabinet in the last fiscal year.

The FBR official cited an example of the Workers Welfare Fund and said it was operated and run by the FBR. Giants in the tobacco sector are resisting the health tax.
The FBR officials said they were awaiting the response of the Ministry of Law and after receiving the advice, they would move forward accordingly. The anti-tobacco lobby has been advocating imposition of the Health Levy as the price increase would discourage consumption, especially among children and youths. They wondered where the health levy has disappeared despite granting of approval by the federal cabinet during the last fiscal year.
The FBR official cited an example of the Workers Welfare Fund (WWF) and said it was operated and run by the FBR. There were two views as some quarters argued that health was a provincial subject, so the Centre could not impose the levy. There is another view that the imposition of levy is the domain of the Centre, so it could move ahead without any jurisdictional issues.

On the other hand, the giant formal tobacco sector companies, including Pakistan Tobacco Company (PTC) and Philip Morris, are sternly opposing this move, arguing that the consumption would not reduce but it would result in shifting of consumers from the formal sector to illicit cigarettes.
The tobacco companies say this could cause a revenue loss to the national exchequer of Rs20 to Rs24 billion per year. Together with the increased share of an illicit product, the estimated losses to the national exchequer could go up to Rs100 billion, they added.

Legal points forwarded to the Ministry of Law were never considered before, so it is essential to seek advice before moving ahead, the FBR official said.