PESHAWAR: A tank-tank has stressed the need for enforcing tobacco tax policies in real sense for effective development and continuation of public health initiatives.

The think tank “The Capital Calling” showed concerns over loopholes in the country’s tax system resulting into a loss of billions of rupees to facilitate tobacco giants. “Pakistan’s economy is currently facing crises,” it said in a press release, citing a current study that revealed that billions of rupees were lost to multinational cigarette companies.

It said that according to the study conducted by Sustainable Development Policy Institute (SDPI), authorities failed to meet the targets of revenue collection from the cigarette industry.

“This manipulation, which resulted in introducing third tier, has caused a loss of revenue amounting to Rs567 billion over the past seven years. The multinational cigarette companies pushed authorities to introduce a three-tier excise duty structure in 2017, while shifting the focus on revenue collection and ignoring adverse effects on public health,” said the statement.

However, it said, it was later proved that the target of collecting more revenue through introduction of the third tier was also missed and was grossly misleading. The study also shed light on the dynamics of the cigarette industry and its strong influence over policymakers.

The statement demanded urgent attention and comprehensive reforms to navigate through these challenges and counter the influence of cigarette companies. The study also highlighted how high and middle-income countries successfully imposed high taxes on cigarette products to decrease consumption and increase government revenues, but Pakistan lacked a clear strategy on using cigarette taxation and prices as a public health tool, it said.

Published in Dawn, February 9th, 2024