–Senator says bill under consideration to fix minimum rate of cigarettes pack at Rs 50
ISLAMABAD: Despite the repeated warnings by the National Health Services and Regulations, the incumbent government decreased the prices of tobacco to generate more revenue which has increased the numbers of smokers in Pakistan to 25 million, a senior official in Health Ministry told Pakistan Today.
Cigarette prices have increased elsewhere in the world to discourage smoking, but on the contrary, in Pakistan, the Federal Board of Revenue (FBR) had lowered the tax slab of several brands of cigarettes and reduced Federal Excise Duty (FED) on their packs from Rs32.98 to Rs16 in the FY 2017-18 budget.
The apparent reason behind this move was to generate more revenue and counter the illicit trade of cigarettes, which has put lives of millions at risk.
This came in violation of World Health Organization (WHO) Framework Convention on Tobacco Control (FCTC), of which Pakistan is a signatory. The FCTC specifically identified that increasing the prices of tobacco products was one way to discourage its consumption.
Under Article 6 of the convention, the signatory has to implement tax and price policies on the production of the product as a way to reduce tobacco consumption.
The official said that Federal Health Minister Saira Afzal Tarar repeatedly said that Pakistan is fully committed to implementing the FCTC with specific reference to SDGs by taking legislative, administrative and coordination measures. However, the government succumbed to the ‘powerful mafia’ and refused to increase cigarettes’ rate.
The official said that multinationals are now looking to further reduce their product prices in Tier I products, in clear violation of the Finance Bill 2017, to fit them into tier II, as the lobbying for the removal of this restriction in the next mini-budget is underway.
The official lamented that the government was more interested in generating revenue and appeasing the big tobacco company than discouraging the dangerous habit.
Health Secretary Naveed Kamran Baloch, while briefing the Senate Standing Committee on NHS this week, said, “Every year about 128,000 people die in Pakistan due to tobacco consumption and the recent decrease in cigarette prices by FBR will encourage youth to smoke.”
Baloch further pointed out that about 60 per cent of the country’s population was less than 25 years of age.
FBR has no justification for the decrease in the price of tobacco other than to curtail the use of illicit cigarettes. However, the official said that the FBR was needed to review the decision and there is need to increase the price of tobacco to discourage its consumers.
Senate Standing Committee on National Health Services (NHS) Chairman Sajjad Hussain Turi told Pakistan Today that the FBR should introduce a tracking and tracing system for tobacco companies to stop tax evasion. In order to discourage smoking, the minimum price for a pack should be at least Rs 50 with an annual increase, Turi said, adding that the strict policy formulation is needed to discourage use of illicit cigarettes in the market.
“Government’s move to decrease the price of cigarettes in a bid to bring all companies under tax umbrella was not a solution to the problem,” the senator remarked.
To a question about Senate Standing Committee on NHS’s directives to FBR to carry out a three-year audit of tobacco companies, he said that there was a State Bank’s report which indicated that not a single tobacco company was going into loss.
According to WHO, tobacco killed over seven million people every year, out of which 108,800 people died in Pakistan.