Health levy on tobacco products: Govt urged to take sustainable revenue measures

ISLAMABAD: Health experts and non-governmental organizations on Friday urged upon the government to take sustainable revenue measures like implementation of health levy on tobacco products to avoid indirect taxation on masses.

In a media interaction held here on Friday, Society for the Protection of the Rights of the Child (SPARC) and Campaign for Tobacco Free Kids termed Tobacco Health Levy as a profitable and sustainable option to solve Pakistan’s financial woes and recommended government to take this route instead of taxing essential commodities.

Under the contingency measures agreed with the International Monetary Fund (IMF), the government was required to increase Federal Excise Duty on Tier-I and Tier-II cigarettes by at least Rs2 per stick with immediate effect to raise at least another Rs120 billion in revenue. However, mini-budget increased FED on cigarettes to the tune of Rs60 billion.

Malik Imran Ahmed, Country head, Campaign for Tobacco Free Kids, mentioned that government has repeatedly said that it has to take harsh decisions in order to fill the state’s coffers and meet IMF’s requirement. However there’s one area where increasing taxation is logical and beneficial and that’s tobacco sector.

Malik Imran mentioned that tobacco induced disease causes an annual economic burden of 615 billion which is 1.6% of Pakistan’s GDP. On the other hand, the revenue generated from the tobacco industry is Rs120 billion.

When a product is causing this much health loss, a levy must be implemented on it. Pakistan moved in this direction in 2019 by tabling a tobacco health levy bill but it hasn’t seen the light of the day due to continuous interference of tobacco industry.

Dr Ziauddin Islam, Former Technical Head, Tobacco Control Cell, Ministry of Health, said tobacco products are non-essential and hazardous items which cause 170,000 deaths every year in Pakistan. On an average, Pakistani smokers spend 10% of their average monthly income on cigarettes.

Due to cheap and easy affordability nearly 1200 children begin smoking every day in the country. A struggling economy such as Pakistan can’t afford this much loss of precious human and finance resources.

Instead of taxing essential items which will raise inflation, government should impose health levy in addition to increase existing FED on tobacco products that are the major source of our health woes, and to reduce mortality and morbidity of tobacco related.

Khalil Ahmed Dogar, Programme Manager, SPARC, stated that this challenging financial situation requires sustainable measures. Pakistan is seeking foreign aid to rescue its citizens from financial disaster.

Therefore, the government should take those decisions which can benefit the health and wealth of the public. One-time measures will bring us back to square one and we will have to ask for foreign aid again. Instead it is important to take decisions which can reap long-term benefits.

This includes increasing implementing health levy on tobacco products and sugary drinks. These steps will generate us much needed revenue and save healthcare costs which will also help the national exchequer.

Copyright Business Recorder, 2023