Govt criticised for reducing taxes on tobacco products

ISLAMABAD: Representatives of government departments, NGOs and international associations gathered outside the National Press Club on Tuesday, the eve of World No Tobacco Day, and criticised the government’s decision to reduce taxes on tobacco products by over 50pc.

They said the government has become “addicted” to revenue from the tobacco industry and cannot take a stand. They demanded that the decision to introduce a lower tax tier for tobacco be withdrawn, and taxes on tobacco products be increased to protect the youth.

On May 17, the Ministry of National Health Services (NHS) wrote to Finance Minister Ishaq Dar and Special Assistant to the Prime Minister on Revenue Haroon Akhtar Khan asking them to increase the federal excise duty (FED) on cigarettes.

The letter suggested that the FED on all the lower slab of all cigarette brands be increased from Rs32.9 to Rs44, which would increase revenue by Rs39.5 billion and prevent 650,000 premature deaths caused by smoking.

Meanwhile, the tobacco industry was seeking reduced taxes through the introduction of a third tier for FED on cigarettes, a move that was incorporated into the budget.

World Health Organisation representative Shahzad Alam said the minimum tax on a pack of cigarettes has been reduced to Rs16 through the introduction of a third tier.

“Unfortunately, the most smoked cigarettes are in the third tier, which will not only increase the consumption of cigarettes but also put public health at stake. The WHO recommends 75pc tax on the retail price of tobacco products. Moreover, a 10pc increase in prices reduces the consumption of cigarettes by 8pc,” he said.

“We fear that the consumption of tobacco products will increase. The third tier has been introduced to stop illicit trade, but unfortunately, here tobacco companies are allegedly involved in the trade of counterfeit cigarettes,” he added.

The project director of the Capital Administration and Development Division’s (CADD) Tobacco Smoke Free Capital project, Dr Minhajus Siraj, said the decision to introduce a third tier was to play with the health of the youth.

“Tobacco use will increase because of the decision. We need to follow international commitments and should withdraw the announcement to introduce the third tier,” he said.

Nadeem Iqbal, the CEO of The Network for Consumer Protection, said the tobacco industry had a long term plan and finally managed to introduce the third tier for withholding tax.

“It is a big shock for the stakeholders because the decision shows that the government is more interested in revenue [than] the health of the youth of the country, because the consumption of tobacco will increase. The government itself is addicted to tobacco [revenue],” he said.

He added that the NHS ministry does not have a federal minister, while the state minister is very weak and cannot make or implement her decisions and recommendations.

The national coordinator of the Coalition for Tobacco Control Pakistan, Khurram Hashmi, said that after the tax reduction, the tobacco industry has two sell two packs of cigarettes instead of one in order to meet the tax target.

“It clearly shows that the government has given a licence to sell more cigarettes and generate revenue at the cost of the health of the people of Pakistan.”

Other participants demanded the immediate implementation of an enlarged pictorial health warning on cigarette packs, which has not been implemented for over a year.

Source: Dawn news