Daily Times

The government is all set to implement health levy on cigarettes from the upcoming fiscal year to discourage smoking, boost revenues and reduce number of non-communicable diseases like cancer, diabetes and stroke.

Dr. Faisal Sultan, a Special Assistant to Prime Minister on Public Health, said that his ministry was working to incorporate the health levy bill on cigarettes into the upcoming Finance Bill to implement it across the country. He said the health levy on cigarettes should have been implemented from the previous fiscal year, but it couldn’t happen due to certain reasons. The federal cabinet approved the health levy in June 2019, but it is yet to be implemented.

A delay in the implementation of the health levy was causing a loss of around Rs38 billion annually to the national exchequer in terms of low tax collection.

The special assistant has vowed not to accept pressure from any influential industry to further delay the imposition of the levy, adding that the levy would help collect additional billions of rupees in taxes that would be sufficient to improve health infrastructure in the country.

Earlier, in a letter to the Ministry of Finance, Dr. Faisal Sultan emphasized upon the need to charge Rs10 per pack of 20 cigarettes health tax on tobacco and Re1 per 250 milliliter on carbonated drinks as approved by the federal cabinet on June 18, 2019.

Sultan said the non-communicable diseases like heart disease, stroke, cancer, diabetes and chronic lung disease were collectively responsible for almost 68 percent of all deaths in Pakistan.

Pakistan is obligated to reduce one-third premature mortality from these diseases mainly caused by the tobacco by 2030 as part of its targets set in Sustainable Development Goals [SDGs], he said.

He said the government could achieve the goal by decreasing the tobacco consumption among the youth through imposition of the health tax. Officials in the Ministry of National Health Services said that they have yet to hear back from the Finance Ministry on the Health Levy Bill.

The imposition of health tax on tobacco and sugary drinks as per decision of the federal cabinet will prove as a catalyst to reduce the non-communicable diseases in the country, he said in the letter, adding that this would also help boost the tobacco revenues.

In Pakistan, tobacco use is a cause of death of around 160,100 persons every year while almost 23.9 million adults currently use tobacco in any form in the country, according to Tobacco Control Cell of Ministry of National Health Services.

It should be noted that the cigarette manufacturers in Pakistan are highly influential within FBR and the government. The three largest companies have all shown increases in their profitability as reflected in their public filings. Despite pocketing millions, the companies exert pressure on government to reduce taxes and avoid slapping the health levy on their products.