ISLAMABAD: The anti-tobacco activists on Wednesday urged the government to enhance Federal Excise Duty (FED) on tobacco products to discourage smoking as quarterly sales of the multinational cigarette companies have posted a significant surge.
The activists said that increasing sales of the cigarettes would mean that number of smokers in the South Asian nation was also increasing which could prove a health disaster for the government if taxes are not increased on tobacco products to discourage their consumption.
“The government cannot only boost its revenue by levying additional taxes on tobacco products, but also discourage the smoking especially in youth,” Malik Imran Ahmed, country head of the campaign for Tobacco-Free Kids informed media here on Tuesday.
According to the latest reports, one of the leading companies has reported a 53 percent yearly growth in gross turnover for the post-budget quarter ended September 30, 2020 to Rs8.2 billion. This is presumably due to higher number of cigarette packs sold in the quarter.
The net turnover, however, had a much bigger jump of 103 percent year-on-year to Rs 3 billion, as the FED rate (equal to share of excise duty in gross turnover) decreased from 52 percent in Jul-Sep 2019 to 45 percent in Jul-Sep 2020.
The market leader company was also not much forthcoming in its latest directors’ review about the superb growth that this player has also seen in the latest quarter. For context, in the Jul-Sep quarter, the company scored a strong gross turnover growth of 27 percent and net turnover growth of 41 percent year-on-year.
Ahmed said the tobacco industry every year tried to manipulate policymakers in order to fill its coffers at the expense of lives of more than 170,000 people who die due to diseases caused and aggravated by the usage of tobacco products.
He said the big tobacco companies would keep at least 37 percent of their cigarettes production undeclared to evade taxes while blaming presence of illicit cigarettes in the market.
The international donor agency suggested to increase at least 30 percent tax on tobacco products annually to boost the revenue and cut smokers number, he said, adding that if the FBR would increase tax on tobacco products by 10 percent, this would lead to a reduction in its consumption by 8 percent.
Copyright Business Recorder, 2020
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