Imposition of health hazard tax on tobacco, sugary drinks opposed

ISLAMABAD: Prime Minister’s Advisor on Finance and Revenue Shaukat Tarin has reportedly blocked a proposal of Ministry of National Health Services, Regulations & Coordination regarding imposition of health hazard tax on tobacco and sugar-sweetened beverages for at least seven months, well informed sources told Business Recorder

During discussion, the Special Assistant to the Prime Minister on National Health Services, Regulations & Coordination Dr. Faisal Sultan raised the issue of health hazard tax on tobacco and sugar sweetened beverages, pending by the ECC for consideration at the time of budget.

He lamented that this important initiative had already been inordinately delayed and now once again postponed. He made a fervent appeal that the decision of the ECC be reconsidered given the health problems caused by these two items.

Tarin, however, argued that this was not the most opportune time for introducing new taxes as it would be tantamount to another mini-budget. He assured that the additional taxes on tobacco and sugar sweetened beverages would be considered in the next budget.

It was pointed out that while scientific evidence against the harmful effects of tobacco was overwhelming, the sugary drinks’ link to diabetes was still not scientifically well established.

There's need to raise taxes on cigarettes

It was suggested that a committee be constituted to finalise its recommendations well before the budget. The committee will comprise of Advisor to the Prime Minister on Finance & Revenue (Convener), Special Assistant to the Prime Minister on National Health Services, Regulations and Coordination and Special Assistant to the Prime Minister on Poverty Alleviation & Social Safety. The National Health Services, Regulations and Coordination Division shall notify the committee and provide secretarial support.

National Food Security & Research Division stated that surplus wheat was available for donating around 150,000 MT of wheat flour to Afghanistan. Similarly, enough stocks of rice were available in the country to dispatch 200,000 MT to Afghanistan as humanitarian assistance. While agreeing, in principle, the cabinet desired that exact quantities be determined after seeking the requirements from the visiting Afghan delegation.

A concern was raised that while cooking oil prices experienced an upward trend when international prices were high, the benefit of the decrease in international prices was not passed on to the consumers by the industry.

Minister for Industries & Production, Khusro Bakhtair suggested that only tool available to the government was fixation of price, which could be linked to the international price, although this was not a desirable option. The majority of the members; however, opposed to the idea of tinkering with the free market and opined that better planning and regulation was the way forward.

Copyright Business Recorder, 2021