Civil society demands more tobacco-related taxes in the upcoming budget | Pro IQRA News

Civil society demands more tobacco-related taxes in the upcoming budget

 | Pro IQRA News

Pro IQRA News Updates.

Health activists and civil society organizations have demanded that the government raise taxes on cigarettes.

Taxation is an important source of income for all governments and taxation of non-essential items such as tobacco not only leads to a reduction in the budget deficit but also in the expenditure on diseases. Sanaullah Ghumman, of PANAH, has long advocated against smoking in society because it causes disease. He has stated that the government must post taxes on cigarettes regularly as recommended by the World Health Organization (WHO).

Malik Imran, Country Director, Campaign for tobacco-free kids (CTFK), has mentioned that due to the government’s decision to increase the Federal Excise Duty (FED) on cigarettes in February 2023, an additional FED 11.3 billion in revenue was received in the fiscal year 2022- 23 which is an increase of 9.7% from the previous year. In addition, an additional 4.4 billion in VAT revenue was received in the 2022-23 financial year, which is an increase of 11.5% from the previous year. This additional 15.7 billion revenue constitutes 0.201% of GDP, which is a significant boost for a struggling economy like Pakistan, he said.

Imran mentioned that these self-explanatory figures reveal that increased taxation is beneficial to the economy but the tobacco industry is misleading everyone by calling out the excuse of illegal trade. Imran added that the inflated number of illegal trade is used to distract people from the under-reporting. These companies underreport their production and then sell their unreported products on the illegal market, causing billions in losses to the national exchequer.

Dr. Ziauddin Islam, a retired government employee, has said that tobacco is the biggest silent killer in Pakistan as over 170,000 people die due to tobacco use every year. This pandemic also causes an annual economic burden of 615 billion which is 1.6% of Pakistan’s GDP. He explained that increased prices lead to a decrease in production and consumption, which reduces the burden of health costs.

According to the calculations, there has been a decrease of 31.7% in declared production of cigarettes during the financial year 2022-23 compared to the previous year. Learning from this example, which is also recommended by the World Health Organization, Pakistan should raise taxes periodically so that inflation and per capita income are taken into account and Pakistanis remain protected from the harms of tobacco products.

Khalil Ahmed Dogar, SPARC program manager said that children in Pakistan are being targeted by the tobacco industry so that “substitute smokers” can be recruited. Around 1200 Pakistani children aged 6-15 start smoking every day. He mentioned that Pakistani smokers spend an average of 10% of their monthly income on cigarettes. Therefore, increased prices remain the most effective tool to keep these killer products out of the purchasing power of children and low-income groups.

Khalil added that all stakeholders must put their differences aside and unite to protect our children and youth from the harms of tobacco. Raising tobacco taxes is one such step that should be implemented regularly.