ISLAMABAD: Health activists urged the government to remain steadfast on its major decision of doubling the Federal Excise Duty (FED) on cigarettes under mini-budget.
In a press release issued by the Society for the Protection of the Rights of the Child (SPARC) here on Thursday, the decision can solve Pakistan’s financial dejection, provided that the government is not misleading by the tobacco industry’s misinformation campaign.
Malik Imran, country head, Campaign for tobacco-free kids (CTFK), mentioned that tobacco induced disease causes an annual economic burden of 615 billion which is 1.6% of Pakistan’s GDP.
Although tobacco industry is one of the major tax payers but the revenue generated from the tobacco industry is 120 billion.
Therefore, the industry can’t claim that it is fulfilling the duty. Majority of the smuggled products belong to international companies operating in Pakistan.
The government must be consistent about the decision it took on tax increase regarding tobacco products because existing tobacco taxes can generate Rs60 billion additional revenue.
Imran also mentioned that in order to gain sympathies tobacco industry uses emotional tactics e.g., provider for poor families etc.
Reality is that the deadly products of tobacco industry are snatching people’s precious resources. He mentioned that on average Pakistani smokers spend 10% of their monthly income on cigarettes. Therefore, this increase will make cigarettes go out of reach of low-income citizens and children, thus saving them for its harms.
Khalil Ahmed Dogar, Programme Manager (SPARC) said that illicit trade is a harsh reality however its percentage is far less than the figure claimed by the industry. This is a cover used by tobacco industry to divert people from the underreporting.
These companies under-report their production and then sell their non-reported products in the illicit market, causing a loss in billions of rupees to the national exchequer.
Furthermore, illicit trade is not an excuse because industry is making deadly non-essential products. Consequently, it should have no qualms in paying the taxes.
Two wrongs don’t make a right. Yes, the government needs to counter illicit trade but it also needs to increase the taxes on tobacco companies.
Copyright Business Recorder, 2023
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