Cigarettes: Rs364bn can be generated by maintaining enhanced FED slabs

Islamabad: The government can generate around Rs 364 billion from the tobacco sector in 2023-24 by maintaining the enhanced Federal Excise Duty (FED) slabs (mini-budget) on cigarettes in the coming amended Finance Bill 2023.

The upcoming amended Finance Bill-2023 implications on the tobacco sector were discussed during a media interaction held here on Tuesday by the health activist and Society for the Protection of the Rights (SPARC).

Health activists informed that the government can earn Rs364 billion from tobacco sector in fiscal year 2023-24. However, the government must remain steadfast on its February 2023 decision of increasing FED on cigarettes.

According to the activists, this additional revenue can be utilized for strengthening public health infrastructure during 2023-24.

Malik Imran, Country head of Campaign for Tobacco-Free Kids (CTFK) higher tobacco taxes are a win-win situation for government. This decision helps the country in generating revenue and decrease tobacco consumption at same time.

It has also been recommended by World Health Organization. He added that Tobacco Industry is leaving no stone unturned to undo the great work done by the government of Pakistan in current year to safeguard children and low income group from the harms of tobacco.

Imran added that the good work done by the government of Prime Minister Shehbaz Sharif must not be lost. The government can stabilize economy and provide relief to citizens as long as it doesn’t get sidetracked by the deceptive campaign of tobacco industry.

Dr Ziauddin Islam, Former Technical Head, Tobacco Control Cell, Ministry of Health, said that despite spending millions on misinformation campaign, the lies of tobacco industry are now fully exposed. This year tobacco industry has practiced tactics, such as front-loading and abrupt changes in production, to avoid tax hikes and influence tax policy.

Tobacco industry has also presented overblown figures of illicit trade, to pressurize government into withdrawing FED in budget. He mentioned that tobacco is the largest silent killer in Pakistan as above 170,000 people die due to tobacco use each year. This pandemic also causes an annual economic burden of 615 billion which is 1.6% of Pakistan’s GDP.

Khalil Ahmed Dogar, Program Manager SPARC said that the tobacco industry has caused billions of loss to the national exchequer. He mentioned that on average Pakistani smokers spend 10% of their monthly income on cigarettes.

Around 1200 Pakistani children between ages of 6-15 years start smoking every day. The sale of cigarettes to minors and near educational institutions remains a constant worry in the country. Therefore increasing the FED will make cigarettes out of reach for low income citizens and children and thus putting them out of harm.

Copyright Business Recorder, 2023