ISLAMABAD: Parliamentarians and activists at a seminar on Monday demanded increase duties on tobacco products, as the taxes in Pakistan were below the standards set by World Health Organisation’s (WHO) Framework Convention on Tobacco Control (FCTC).
The seminar titled ‘Increase FED on Tobacco Products’ was organised by the Human Development Foundation.
The speakers demanded the government to increase federal excise duty (FED) on tobacco products, including smokeless tobacco products.
Senator Ayesha Raza Farooq said, according to WHO, tobacco use was the world’s leading cause of preventable deaths. It increases the burden on low and middle income countries that have been targeted by the tobacco industry with its deadly products and deceptive marketing practices.
Senator Farooq said increasing taxes on tobacco products was a proven effective measure to control and reduce their consumption.
She expressed her support for increasing taxes on tobacco products, including FED and health levy, with periodical adjustments of inflation rates in order to make it less accessible to the youth.
The seminar was informed that currently, there were two tax slabs for cigarettes in the country, Rs33 FED is imposed on cigarettes costing less than Rs90 per packet and Rs90 on cigarettes with a price of Rs90 and above.
However, these taxes are still below the standard set by FCTC to which Pakistan was a signatory since 2005.
FCTC requires signatories to optimally impose a 75pc tax on the retail price of cigarette packs, and Pakistan has yet to achieve this standard.
The participants unanimously adopted a resolution demanding the government to increase the FED for each slab of cigarettes by at least 30pc, which will also enhance revenue collection and lower the consumption of tobacco, especially among the youths.
Sustainable Policy Development Institute (SDPI) Executive Director Abid Sulehri said the government was facing a financial crunch due to the Covid 19 pandemic, and the economic cost of smoking in Pakistan was estimated at Rs143 billion in 2012.
“This includes direct healthcare costs and costs due to lost productivity, according to a 2018 report entitled Global Economic of Smoking-Attributable Diseases,” he said adding that to adjust the inflation rates in the upcoming budget, the government needs to increase the current FED on tobacco products to at least 30pc.
“By doing so, revenues for the government will increase which can be channelised into health and education programme initiatives of the government.” Mr Sulehri added.
Social Policy and Development Centre (SPDC) director Mohammad Waseem said that the current pricing regime of cigarettes served dual purpose, as it increased the industry’s profit per pack and industry used this price increase as an excuse to avoid any tax increase claiming that the prices were already too high.
He highlighted that the revenue loss to the government due to under reporting in 2017 and 2018 was Rs35 billion and Rs15 billion respectively.
Published in Dawn, February 9th, 2021