LAHORE: Tobacco is a highly lethal and addictive substance endangering millions of lives every year. Consumed in any form, excessive use of tobacco results in substantial economic and social losses across the globe.
World Health Organization (WHO) asserts that around 1.1 billion people smoke regularly, thereby causing around 8 million deaths annually which includes 1.2 million non-smokers as well. Based on such horrendous statistics, tobacco has been characterized as a global epidemic.
The worst aspect of such frequent tobacco consumption is that around 80 percent of these smokers live in developing countries, thereby escalating the health cost burden on their fragile economies. Globally, tobacco causes a loss of about annual $1.4 billion and about 40 percent of these costs are borne by under-developed nations.
In this context, taxation has been considered as one of the most useful tools to lower the tobacco consumption. WHO asserts that high taxation and increased prices have always resulted in the decreased use of tobacco products. The data also suggests that the trend of cigarette smoking declines in the presence of a strong taxation regime, thereby encouraging states to improve their tobacco taxation strategies. As per WHO guidelines, if all the countries impose at least 50 percent excise duty on a cigarette pack, the number of tobacco consumers would decrease by 49 million.
Organizations like Bill and Melinda Gates foundation and Bloomberg are also striving for a global coalition to bring about tobacco tax reforms across the globe.
As far as South Asia is concerned, the cigarette tax scorecard 2020 paints an overall dismal picture of tobacco taxation policies levied in the region. With a score of 1.88 out of 5 points, Indian tobacco taxation regime is much lower than the global average of 2.07. The amendments in local taxation regime started in 2011 with augmented excise duty in 2014-15 and banning of e-cigarettes in 2019. Due to such efforts, in 2020, the local tobacco taxes reached a record of 348 billion Indian rupees. However, despite of its continuous efforts to increase the taxation on tobacco products annually, the fact remains that its health costs could not be reduced as envisioned due to the differential tiered tax system.
Conversely, both Bangladesh and Sri Lanka have shown tremendous improvement in curtailment of tobacco related products. Sri Lanka is the only country in region which has scored 3 out of 5 points on cigarette score card. The reverse shift of Value Added Tax (VAT) and excise duty were the major factor behind bringing down the cigarette consumption in Sri Lank. While increasing the excise duty levied on tobacco products in 2016, the affordability of cigarettes was reduced sharply, leading to the production of 4 billion cigarettes per annum in 2016 as compared to 5.2 billion sticks per year in late 1990s.
Therefore, Pakistan needs to pass detailed legislations in favor of banning both direct and indirect forms of tobacco advertisements. In this context, under the act of corporate social responsibility, any activity of brand sharing, distribution and promotional ads should be strictly barred. All of these steps are the need of the hour to ensure tobacco free Pakistan.—PR
Copyright Business Recorder, 2021