ISLAMABAD, 19th April 2019: Anti Tobacco activists on Thursday stressed the government to align prices of tobacco products with increased inflation rate in the country and implement recommendations of Senate standing committee for eliminating third tier on cigarettes.
Doing so can add Rs250 billion in national exchequer in next three years said speakers who were speaking at a pre-budget session with media on Senate Committee recommendations to increase tobacco tax. The session was organized by Society for the Protection of the Rights of the Child (SPARC).
Participants who spoke at the podium urged government to devise policy on tobacco taxation and implement the recommendations of Senate Standing Committee of eliminating third tier of cigarettes. Participants also highlighted the fact that despite inflation and increase of prices on all commodities, the prices of cigarettes did not increased keeping the cigarettes and other tobacco products within the reach of the children’s buying power.
The speakers said that Pakistan’s population consists of 60 per cent youth below the age of 25 where alarming statistics of young people getting addicted and at risk of tobacco consumption calls for strict tax reforms and checks for selling cigarettes to the minors particularly.
Executive Director SPARC Sajjad Ahmed Cheema said that it was estimated that if the government eliminates the lowest tax tier and brings the FED of the lower tier to Rs40, it would raise significant additional tobacco tax revenue of Rs18.4 billion, a 20.9% increase from the current tobacco tax revenue.
He said that as an added advantage, it would reduce cigarette consumption by 12.6 per cent and reduce the number of smoking-related deaths among current and future smokers by 3.1 per cent (a reduction of about 0.35 million people every year).
“Considering the fact that increase in dollar price has an effect of the increase in the price of basic goods for living like fruits and vegetables etc., whereas on the other hand, the prices of tobacco products are the same. We are still unable to get why this sector being ignored for an imposition of taxes who has been contributing a lot to increase the health cost and burden of diseases on our Nation,” he said.
Malik Imran Ahmad from Campaign for Tobacco Free Kids, Pakistan office said that big tobacco industry caused a whopping Rs153 billion loss to the national exchequer between 2016-19 by being awarded low tax rate and adjusting the prices of their most sold brands.
After introduction of third tier, around 160 billion cigarettes were produced from May 2017 to March 2019. Big tobacco companies share 75% of the total market, which means that they were able to sell 120 billion cigarettes in the same period, they said.
Loss of revenue due to introduction of 3rd tier (low tobacco taxes) is Rs77.85 billion from 2016 to 2019. Loss of revenue due to price adjustments is Rs75 billion from 2018 to 2019.
Manager Research SPARC Khalil Ahmad shared that Pakistan was one of the 15 countries with the heavy burden of tobacco-related health issues. Around 1,000 to 1,200 Pakistani children between ages of 6-15 years start smoking every day, according to the Global Adult Tobacco Survey results of 2015.
Having one of the youngest population in the world with 60% youth below the age of 25 years it is alarming to know that 1000 to 1200 children between the ages of 6-15 years start smoking everyday (According to Global Adult Tobacco Survey – 2015) that calls for strict tax reforms and checks for selling cigarettes to the minors particularly.