ISLAMABAD: The Federal Board of Revenue (FBR) has challenged the federal ombudsman’s direction to implement the World Health Organisation (WHO)’s Framework Convention on Tobacco Control (FCTC) and make cigarettes inaccessible to the youth by increasing their prices.
The ombudsman’s decision announced in the last week of September had to be implemented within 30 days. However, as the FBR filed an appeal with the president of Pakistan the implementation period has been extended to another 60 days.
FBR spokesman Dr Mohammad Iqbal told Dawn that the federal ombudsman had no right to take such decisions against laws made by parliament. Only parliament or the Supreme Court can amend or reject a decision taken by parliament. He said the parliament had allowed a decrease in the prices of cigarettes so the ombudsman cannot declare it illegal.
FBR says parliament has allowed a cut in prices of cigarettes and federal ombudsman cannot overrule it
Before the announcement of the current year’s budget, the Ministry of National Health Services (NHS) had suggested increasing the tax on cigarettes. It had recommended that the minimum tax should be Rs44 on a pack of 20 cigarettes. But in the 2017-18 budget, a third tier of taxation was introduced for cigarettes after which the tax was reduced to as low as Rs16 per pack.
As the legislation drew criticism across the country, the Pakistan National Hearts Association (Panah) filed an application with the office of the federal ombudsman and alleged that the decision to lower the tobacco tax was based on statistics provided by the tobacco industry and recommendations of the ministry of NHS were ignored.
Moreover, it claimed that under the FCTC, an international treaty signed by 128 countries, Pakistan should increase the prices of cigarettes and make them inaccessible to the youth.
Federal Ombudsman Syed Tahir Shahbaz in his ruling directed the Ministry of Finance and the FBR to increase the prices to make cigarettes inaccessible to the youth. He also directed them to stop the sale of illicit, counterfeit and smuggled cigarettes.
Moreover, the ombudsman said the compliance should be reported within 30 days of the receipt of the findings, or reasons for not doing so intimated.
In case of non-compliance, the ombudsman is authorised to take up the matter with the president.
The FBR in its appeal to the president claimed that the FCTC did not place any bar on countries with respect to taxation and only recognised that price and tax measures were an effective and important means of reducing consumption [of tobacco] by various segments of the population, in particular the youth.
In the meantime, FCTC allows countries to establish their taxation policies, it added.
The FBR also claimed that the increase in prices had allowed illicit and non-duty paid cigarettes to take market share from the legal cigarettes.
To prove its point, the FBR claimed that in 2013-14 the amount of tax collected from the tobacco industry was over Rs88 billion, in 2014-15 it reached the mark of Rs102 billion and in 2015-16 the tax revenue from the industry was Rs114 billion. However, it reduced to Rs83 billion in 2016-17.
The FBR requested the president that the findings and recommendations of the ombudsman dated September 28 be set aside.
Panah General Secretary Sanaullah Ghumman told Dawn that the FBR cared about the profit of the tobacco industry rather than the health of the citizens.
“Because of the appeal the implementation of the ombudsman’s decision has been stopped for another 60 days. It (FBR) may use some other tactics to stop the implementation even after 60 days,” he said.
“We appeal to President Mamnoon Hussain to reject the FBR’s appeal and direct it to implement the decision of the ombudsman at the earliest,” he said.
It may be mentioned that in Pakistan smoking causes an estimated 90pc of all lung cancer deaths in men and 80pc in women and claims lives of 100,000 people every year.
Tobacco smoke contains 4,000 chemicals out of which 250 are known to be harmful for humans and 70 of them cause cancers. More than 600,000 nonsmokers are dying each year from secondhand smoke worldwide and one-third of them are children.
Published in Dawn, November 8th, 2017