Health activists support IMF’s tax policy recommendations on revamping tobacco taxation

ISLAMABAD: Health activists Friday strongly supported International Monetary Fund’s (IMF) tax policy recommendations with specific focus on revamping tobacco taxation.

The consensus has been developed during the event “Fueling Economic Growth through Increased Tobacco Taxation” organized by the Society for the Protection of the Rights of the Child (SPARC) here on Friday.

The event was attended by leading health activists, anti-tobacco organizations and representatives of Health Ministry and Federal Board of Revenue (FBR).

During the event, the activists urged the government to transition to a “single tier tobacco taxation system” thereby eliminating the second tier. This strategic move is deemed essential not only for boosting revenue but also for relieving the healthcare cost burdens imposed by tobacco-related illnesses.

Malik Imran Ahmed, Country head Campaign for Tobacco Free Kids (CTFK), highlighted the alignment between the IMF’s recommendations and the actual revenue potential within the current fiscal situation of Pakistan.

Imran emphasized the urgent need to tie these objectives with tobacco taxation, stressing the imperative of reforming Pakistan’s cigarette taxation system.

Malik Imran further emphasized that revitalizing Pakistan’s cigarette taxation system transcends mere fiscal considerations; it is a matter of urgent public health concern. He lamented that despite the substantial taxes imposed on cigarettes, the revenue generated falls short of covering the healthcare costs incurred due to smoking-related illnesses. In the fiscal year 2022-23, taxes covered a meagre 16% of these expenses, indicating a significant decline from 19.5% in 2019.

Dr Khalil Ahmad Dogar, Programme Manager at SPARC, underscored the alarming prevalence of tobacco use in Pakistan. With approximately 31.9 million adults aged 15 years and above reported as current tobacco users, constituting nearly 19.7% of the adult population, the dire consequences of tobacco consumption extend far beyond individual health.

He stressed the urgent need for immediate action to bridge the gap between tobacco tax revenue and healthcare costs. He advocated for the adoption of a Single Tier Tobacco Taxation System, as a means to not only bolster revenue but also to alleviate the health and economic burdens associated with tobacco consumption.

Copyright Business Recorder, 2024