Action against illegal tobacco trade: Health activists hail PM’s directive to FBR

ISLAMABAD: Health activists Friday appreciated Prime Minister Shahbaz Sharif’s strict directives to the Federal Board of Revenue (FBR) to curb the illegal trade of tobacco products in Pakistan.

In a press release shared by the Society for the Protection of the Rights of the Child (SPARC) on Friday, the health activists mentioned that Federal Board of Revenue’s Track and Trace system has kept illicit trade from going above 15 percent.

This system should be implemented in all companies to achieve further benefits. The activists also mentioned that during pre-budget seasons, tobacco industry uses blown up percentage of illicit trade to influence the policymakers from raising taxation according to the rate of inflation.

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. He said that an industry which is causing such unprecedented level of damage to public health and economy, brazenly claims that any damage control move is against Pakistan’s interest.

Imran mentioned that every budget season, tobacco industry uses the illicit trade excuse to ensure that tobacco taxes are not increased. 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 billions of loss to the national exchequer. He quoted findings of a latest research on illicit cigarette Pakistan which revealed the percentage of illicit packs of cigarette was around 15%.

Imran mentioned that tobacco industry should not have any problems paying the additional taxes because it never pays them from its own coffers. Tobacco companies have increased their net-of-tax prices. Due to overshifting, the excise tax share in retail price remains at 51.6%, lower than the widely-accepted benchmark of 70%.

Dr. Ziauddin Islam, Former Technical Head, Tobacco Control Cell, Ministry of Health, said that tobacco is the largest silent killer in Pakistan as above 170,000 people die due to tobacco use each year. He explained that increased prices bring a decrease to production and consumption which decrease the health cost burden.

Although there has been 31.7% decline in production declared by TI in fiscal year 2022-23 compared to the previous year which is ‘win win’ condition, keeping in view of aim of tobacco control to decrease consumption coupled with increase in revenue generation.

Copyright Business Recorder, 2023