Govt urged to impose health levy to generate funds

Updated 20 Mar 2020

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Anti-tobacco advocates suggest imposition of health levy on tobacco products and sugary drinks. — Dawn/File
Anti-tobacco advocates suggest imposition of health levy on tobacco products and sugary drinks. — Dawn/File

ISLAMABAD: While the country is facing a severe shortage of funds to combat the coronavirus (COVID-19), anti-tobacco advocates suggested to the government to impose a health levy on tobacco products and sugary drinks that could generate Rs50 billion.

In a statement, Human Development Foundation Chief Executive Officer Azhar Saleem said a higher tax on tobacco products and sugary drinks was an effective measure to reduce the case burden of non-communicable diseases.

“In the current situation of coronavirus pandemic, Pakistan will have to face its aftermath with worsened economic condition putting heavy burden on the budget. Approximately, four billion packs of cigarettes are being sold in Pakistan annually.

“Last year, the government announced a health levy of Rs10 per pack of cigarettes and Re1 per 250ml of sugary drinks. However, the health levy approved by the cabinet, was not presented in the Financial Bill 2019-20 and, therefore, could not be implemented,” he said.

“If the health levy is imposed on cigarettes, the government will generate about Rs40 billion per year in addition to the existing tax revenues. Same is the case with sugary drinks.

According to a 2013-14 survey, Pakistan produces 2.063 billion litres of soft drinks per year. If Re1/250ml health levy is imposed on soft drinks, it will help generate eight to 10 billion rupees annually.”

He said the government needs to adopt a futuristic approach and channelise the additional revenues into situations where financial setbacks are faced such as the current pandemic of coronavirus.

This additional 40 to 50 billion rupees will continue in lessening the financial crunch that the country is facing.

Mr Saleem urged the government to consider implementing the health levy on cigarettes and sugary drinks on an immediate basis to generate the much-needed revenue.

Published in Dawn, March 20th, 2020