Budget 2021-22: Govt urged to ensure single-tier tax system on tobacco products

ISLAMABAD: Anti-tobacco activists and tax experts on Saturday said that the introduction of single-tier taxation system on tobacco products in budget 2021-22 is the only solution to raise revenue and bring down expenditure on tobacco-related diseases.

Talking to selected group of journalists here on Saturday at the Islamabad Press Club, they urged the government to ensure single-tier of the Federal Excise Duty (FED) on the tobacco products in the upcoming budget, adding that different taxation tiers on tobacco products were only benefitting multinational tobacco companies to avoid taxes and contributing to increase in number of smokers in the country.

Besides, the Country Representative of Campaign for Tobacco Free Kids, Malik Imran said that Pakistan has not increased tax on tobacco products for the last four years while prices of all other commodities have increased manifold due to inflation.

He said the government should enforce a single-tier taxation system through the budget to save youth and kids from becoming smokers. He questioned the multinational tobacco companies' resistance to the single-tier taxation system, saying the consumers would pay the higher taxes and the companies should back it.

A recent research study by The University of Edinburgh has also urged Pakistani government to reform tobacco taxation policy, since taxes can raise revenue, are a proven strategy to avoid tobacco-related mortality and morbidity, particularly in the context of Covid-19.

The cigarettes in Pakistan became more affordable in 2020-21 from a combination of no change in the federal excise tax and increases in nominal income and inflation. Pakistan is ranked among the worst-performing countries in the Tobacconomics Cigarette Tax Scorecard with a score of less than one on a five-point scale.

Copyright Business Recorder, 2021