islamabad - Ministry of National Health Services (NHS) has proposed the finance division to eliminate the third slab of cigarette category before the upcoming budget as the country is stepping towards adopting a tobacco free generation policy, said an official on Saturday.
The official said that ministry like last year has intimated the finance division to increase the taxation on tobacco industry as the Pakistan is signatory of World Health Organization (WHO) Framework Convention on Tobacco Control (FCTC).
Under the treaty government is bound to increase the tax to reduce the tobacco consumption in the country, said the official.
The official said that ministry has raised its concerns on the third slab introduced by Federal Board of Revenue (FBR) last year for specific tobacco brands which reduced their price and increased the consumption.
“Pakistan is moving towards adopting ‘Tobacco Free Generation’ which has also been adopted by Nepal and other countries of Asia,” he said.
Official said that ministry has not only asked the finance division to end the third slab of cigarette industry but also to do air marking from the tax collected.
Official said that health ministry has asked to allocate the tobacco collected tax for the tobacco control and other public health services.
The official said that only 10percent illicit trade of cigarette is reported in the market while the number is exaggerated by tobacco industry stake holders to relax the tax on tobacco brands.
He said that health ministry in a meeting decided to urge the finance division to increase the taxation as government is heading towards lowering the tobacco consumption to address the cancer diese4e in the country.
The official said that the health ministry has intimated finance division that the illicit trade of cigarette is because of non-implementation of enforcement of law to control the trade.
The ministry, in connection to this, has clearly asked finance division to end the third tier from cigarette slab in the upcoming budget.
The official said that Pakistan, in comparison to India, imposes far lower taxes on the tobacco industry and will therefore face challenges in curbing health diseases caused by tobacco consumption.
The size of pictorial warning on a cigarette packet will also be increased up to 60 percent in June and then to 80 percent in 2019.
The prices of cigarettes brands were increased in 2013-16 in two slabs. However, in May, the FBR introduced the third slab after multinational companies reported decline in their production and the government collected less revenue from the industry.
The FBR documents available with The Nation suggest that the rate of federal excise duty on the first tier of cigarettes is Rs3705 per 1,000 cigarettes while Rs1,649 per 1,000 cigarettes in the 2nd tier.
The official said that the third slab led to a cutting the prices of four brands of cigarettes, which were early sold for above Rs70 a pack of twenty to Rs48. He added that this ultimately led to increased consumption of tobacco and also, increased profit of the companies.
Federal Minister for Health, Saira Afzal Tarar ,talking to The Nation said that NHS is keen to end the third slab introduced by FBR as it increased the tobacco consumption after prices of cigarette was lowered.
She also said that ministry will appreciate the increase of taxation on tobacco industry in upcoming budget.
“Third tier is a matter to be addressed by finance division however the health ministry is not in favor of relaxing policies in tobacco consumption,” she said.
