The revenue addicted government gives little value to human life since it reduced the tax on tobacco products in its current budget despite National Health Services Regulation and Coordination (NHSRC)’s clear warning of its far-reaching negative impacts.
According to the Ministry of Health statistics, about 100,000 people die annually in Pakistan due to tobacco use; however, the government allegedly encouraged tobacco use by drastically reducing the tax on tobacco products, instead of increasing the tax to discourage its consumption.
State Minister for NHSRC Saira Afzal Tarar wrote to Finance Minister Ishaq Dar, recommending that lower slab of all brands of cigarettes should have a minimum specific tax of Rs44 per pack of 20 cigarettes; however, contrary to it, the government reduced the tax on tobacco products from Rs32.98 to Rs 16 in order to generate more revenue.
According to a research study on tobacco taxation in Pakistan, jointly conducted by FBR, World Bank, University of Toronto, Johns Hopkins University, University of Illinois at Chicago and Beacon House National University, a uniform specific excise tax that accounts for Rs44 per pack of 20 cigarettes could reduce the number of smokers by 13.25 besides increasing tax revenues by Rs39.5 billion.
The study shows that it could lead to a reduction of 0.65 million premature deaths caused by smoking among current smokers, while also preventing 2.55 million youth from taking up smoking.
Pakistan signed Framework Convention on Tobacco Control (FCTC) in 2004; under its Article 6, Pakistan has to implement tax and price policies on tobacco productions as a way to reduce tobacco consumption.
According to the official statistics, in Pakistan, an average of 300 people has died daily due to tobacco use, whereas around 1200 children aged ranging from 6 to 15 started smoking daily.
A senior official at the health ministry told Pakistan Today that with the decrease in the price of tobacco, the consumption increases; resultantly, the ratio of death rate and new smokers would increase; however, even then the government has bothered very little to pay any heed to issue of great human concern.
Tobacco taxes that translate into price increases are considered as the single most effective option for reducing tobacco use and increasing revenues, as higher tobacco taxes save money by reducing tobacco-related health care costs.
The working group consisting of experts from the Federal Board of Revenue (FBR), the Bloomberg Partners, World Health Organisation (WHO), World Bank and Tobacco Control Cell recommended that lower slab of all brands of cigarettes should have a minimum specific tax of Rs44 per pack of 20 cigarettes, with annual adjustment to tobacco tax rates introduced to minimise the impact of inflation and per capita income growth.
All exemption of tobacco taxes provided at S. No. 4 of the Schedule 3 of Federal Excise Act (i.e. Navy, President of Pakistan, President of Azad Jammu and Kashmir (AJK) and governors of the provinces, members of their families and guest) should be removed.
However, the official said that these taxes were not removed because these are the privileged class though it would encourage the use of tobacco.
He said that the government increased the cigarettes slab from two to three and decreased Federal Excise Duty (FDE) on the 80 per cent smoked cigarettes from Rs32.98 to Rs16 due to which the price of this brand decreased from Rs72 to Rs48, while tax slightly has been increased on the 20 per cent smoked cigarettes from Rs32.98 to Rs33.40 only.
The official said that the cigarettes prices were reduced on the excuse to reduce the illicit cigarettes trade; however, the practice could be stopped through FBR enforcement rather than decreasing the prices of the commodity.
“Even though the FBR accepted the fact about its health cost because of the diseases mainly caused by tobacco use and the subsequent increase in import of medicines and construction of new hospitals, yet it is not ready to tax the tobacco products,” he lamented.
The official said that FBR’s sole purpose is to generate revenue, as it has no concern about its health hazards, adding that FBR pleaded that the sales of tobacco would decrease with price increase so the target of revenue would not be achieved.
Besides, he said that BFR was of the view that if tobacco prices were increased, people would start using smuggled and non-custom paid cigarettes.
The official said that it’s nothing but a lame excuse because the government is only really interested in revenue generation rather than giving serious thought to human interests because it will not only increase the consumption of cigarettes but also put the public health at stake.
“Since there is no federal health minister, the state minister is very weak; she could only recommend, not force the government to implement her recommendations,” he added.
Pakistan National Heart Association (PNHA) also wrote a letter to Prime Minister Nawaz Sharif and recommended a 75pc tax on retail prices but to no avail.
