Govt functionaries criticised for ‘bowing’ to cigarette companies

Updated April 19, 2019

Email

Activists say the country ignores the international conventions it has signed against the spread of tobacco consumption. — AFP/File
Activists say the country ignores the international conventions it has signed against the spread of tobacco consumption. — AFP/File

ISLAMABAD: Members of civil society working in healthcare and child rights criticised government functionaries on Thursday for bowing to cigarette manufacturers and ignoring the international conventions Pakistan has signed against the spread of tobacco consumption.

A discussion was organised by the Society for the Protection of the Rights of the Child (Sparc) to demand that the third tier of taxation for cigarettes is abolished. Speakers said that government functionaries openly favoured multinational cigarette manufacturers under the garb of revenue generation, resulting in around Rs143 billion in healthcare expenditure.

Pakistan National Heart Association (Panah) Secretary General Sanaullah Ghumman said that despite decisions by the Federal Ombudsman, Public Accounts Committee, the Senate Special Committee on Decline of Tax Collection on Tobacco, the president and the finance minister, taxes on cigarettes could not be raised.

“This is because the bureaucracy is very strong and the FBR is openly favouring multinational cigarette manufacturers, who actually act like mafias in third world countries like us,” Mr Ghumman said.

He added that smoking was on the rise because of the new tax structure, which reduced cigarette prices.

He said they had received reports that 1,000 to 1,200 children between the ages of 12 and 15 become new smokers every day in Pakistan, adding: “Deaths because of tobacco have increased.”

He said multinational companies observe the rules and business ethics in developed countries but “are involved in the dirty work of promoting smoking in third world [countries] like us”.

The speakers said Pakistan was a prime focus for these companies because 60pc of the population consists of the youth, and they tend to become an easy target for their products.

Malik Imran from the Pakistan chapter of the Campaign for Tobacco Free Kids spoke about the tiered taxation system for cigarettes.

He said that two multinational companies had benefited from the introduction of a third tax tier in the 2017-18 budget, which had resulted in a reduction in the tax rate for brands in the lowest slab.

He said: “The State Bank report highlighted that cigarette consumption increased by 34pc after the introduction of the third tier and the profits of cigarette companies increased by 34pc.”

He added that the country lost Rs153 billion in revenue between 2016 and 2019.

Sparc Executive Director Sajjad Ahmed Cheema said that the Federal Board of Revenue’s point of view is that increasing taxes would lead to a rise in illicit trade.

Published in Dawn, April 19th, 2019