Tobacco taxes should be increased on regular intervals to reduce consumption: Experts

ISLAMABAD    -   Increased tobacco taxation is a win-win sit­uation for the government and people of Pakistan provided that the government re­mains steadfast on its decision of increasing tobacco taxation.

These arguments were raised during an event organized by Society for the Protec­tion of the Rights of the Child (SPARC) with Federal Board of Revenue FBR and Elected Representatives.

The event explored economics of tobac­co, health cost burden and tactics of tobac­co industry in presence of key journalists to gather support for Federal Board of Reve­nue’s (FBR) track and trace system.

Malik Imran, Country Head, Campaign for tobacco-free kids (CTFK), mentioned that tobacco industry caused Rs 615 billion eco­nomic burden to our country therefore it must be taxed heavily and regularly.

He mentioned that due to government’s decision of increasing Federal Excise Duty (FED) on cigarettes in February 2023, an additional 11.3 billion FED revenue and 4.4 billion VAT revenue was obtained in fis­cal year 2022-23. This additional revenue makes up 0.201percent of our GDP which is a significant boost for a struggling economy like Pakistan.

Imran stated that the Illicit trade is an ex­cuse used by the tobacco industry to avoid taxes. In reality, the tobacco industry prac­tices underreporting where they hide their actual production figures to avoid taxes. Cigarette manufacturers also shift the tax burden to consumers to increase their own profitability.

Rizwan Sarfraz, Additional Project Di­rector, Track and Trace System, FBR, men­tioned that the track and trace system (TTS) implemented by the Federal Board of Rev­enue (FBR) in Pakistan has achieved sev­eral achievements. These include tech­nology-based monitoring, increased transparency, improvement in tax compli­ance, and reduction in the prevalence of counterfeit goods in the country.

He mentioned that since the production of cigarette sticks decreased 6.5percent from July-December 2021 to July-Decem­ber 2022 and during the same time FBR’s tax collection improved by 11.75f percent. This is a major achievement of the Track and Trace System.

Nisar Ahmed Cheema, Member Nation­al Assembly, said all stakeholders must work tirelessly to ensure that health of Pa­kistanis doesn’t suffer at any cost. He men­tioned that FBR’s track and trace system must be implemented in all companies so that important tax revenue is not lost. He also urged the parliamentarians to work for consistent and adequate increase in tobac­co taxation.

Dr Ziauddin Islam, Former Technical Head, Tobacco Control Cell, Ministry of Health, said that the annual 170,000 deaths from tobacco and 615 billion economic bur­den require sustainable measures. Pakistan should increase tobacco taxes on regular in­tervals to reduce consumption and gener­ate revenue.

Khalil Ahmed Dogar, Program Manager SPARC said that to protect the children from harms of tobacco all stakeholders must cast their differences aside and unite to pro­tect our children and youth from an indus­try which is causing billions of losses to the national exchequer. Increasing tobacco tax­es is such a step which should be regularly implemented.