Anti-tobacco activists and health experts on Wednesday rejected a proposal submitted by multinational cigarette companies to the Federal Board of Revenue (FBR), suggesting a reduction in taxes from Rs 1,650 per 1000 cigarettes to Rs 1,250 per 1,000 cigarettes in tier-II tax rates.
The health experts said that this would lead to consumption of the cigarettes, increase health burden on the national kitty besides contributing to a reduction in the national revenue.
The companies have also suggested the FBR to increase taxes on cigarettes falling in tier-I of the tax rate from Rs 5200 per thousand cigarettes to 5600 per thousand, which activists termed a gimmick by the industry to trick the people. The activists argued that the proposed proposal will not only hit the Health of the people also would cause loss in government revenue as 80 % of MNCs volume falls in tier II. “This has already happened in the past. The government after relying on MNCs data introduced a third tier which resulted in loss of 34 billion in revenue and the government had to revert back to Two tier structure,” Azhar Saleem, chief executive officer at Human Development Foundation, said. “The fate of the proposal wouldn’t be different from that. In fact, the government should adopt best practices and abolish the tier system on cigarettes and simply increase 20 rupees Federal Excise Duty on cigarettes for each slab of tobacco tax structure in the budget to enhance revenue collection and discourage tobacco use,” he added, and urged the government to initiate tax measures to discourage the tobacco use and increase the tax revenue as per guidelines of the World Health Organisation.
“In Pakistan, tobacco use remains a major public health challenge claiming 160,000 lives annually. Furthermore, 1,200 Pakistani children between the ages of 6 to 15 starts smoking daily which is alarming,” Special Assistant to Prime Minster on Health Dr Zafar Mirza said in a recent statement.
Last year, the health ministry had proposed implementing health tax on tobacco products and in 2018 it had asked FBR to increase tax on tobacco products to spend the additional revenue on health sector.
According to health experts and advocates, the severe shortage of funds faced by Pakistan to combat the coronavirus could be overcome by imposing more taxation on tobacco products. They said the government should adopt a futuristic approach and channelize the additional revenues into situations where financial setbacks are faced such as the current pandemic of coronavirus. This additional revenue will continue in lessening the financial crunch that the country is facing, they added.