PANAH concerned over rising sale of cigarettes in country

Author: Staff Report

Pakistan National Heart Association (PANAH) has set off caution against the rising sale and profits of cigarette makers in the country, linking it with the rise in diseases and death rate.

Its General Secretary Sanaullah Ghumman said in a statement that profits of three big tobacco companies -British American Tobacco (Pakistan Tobacco Company), Phillip Morris International and Khyber Tobacco Company – clearly show that number of smokers is rapidly increasing in Pakistan, putting on burden on health infrastructure and increasing the number annual deaths.

These companies have posted massive quarterly profits and paid millions of rupees to their local and international shareholders while tax collection on the products remain stagnant.

They are clearly showing increased sales since cigarettes prices have not been increased for 18 months.

All these three companies are listed on Pakistan Stock Exchange, therefore their data is publicly available. According to the official data, Khyber Tobacco Company has reported a 44 percent yearly growth in gross turnover for the financial year that ended on June 30, 2020 to Rs140 million.

The data shows that Philip Morris (Pakistan) Limited has reported a 53 percent yearly growth in gross turnover for the post-budget quarter that ended on September 30, 2020 to Rs8.2 billion.

The net turnover, however, had a much bigger jump of 103 percent year-on-year to Rs3 billion, as the FED rate (equal to share of excise duty in gross turnover) decreased from 52 percent in Jul-Sep 2019 to 45 percent in Jul-Sep 2020.

The market leader Pakistan Tobacco was also not much forthcoming in its latest directors’ review about the superb growth that this player has also seen in the latest quarter. In the July-September quarter, the company scored a strong gross turnover growth of 27 percent and net turnover growth of 41 percent year-on-year.

Ghumman stated these major tobacco manufacturers are evading taxes with the connivance of the Federal Board of Revenue (FBR) officials.

The World Health Organization said that tobacco kills up to half of its users while over 80 percent of the world’s 1.3 billion tobacco users live in low and middle income countries including Pakistan. He said these companies present baseless and factually incorrect data to the public and policy makers to benefit their shareholders.