Govt urged to implement Senate recommendations on tobacco tax

PESHAWAR: Participants of a virtual pre-budget session on Sunday questioned the interference of international business organisations in tobacco taxation in Pakistan and said the government should implement the Senate committee’s recommendations to increase tax on tobacco.

The virtual pre-budget session was organised by the Society for the Protection of the Rights of the Child (SPARC).

Speaking on the occasion, Malik Imran Ahmad, country head of the Campaign for Tobacco Free Kids (CTFK), deplored the negative role of Overseas Chamber of Commerce and American Business Council of Pakistan whereby these organizations were found demanding a decrease in tobacco taxes in Pakistan.

He questioned why these international organisations were not demanding a decrease in tobacco taxation in their own countries. “These organizations are protecting the interests of tobacco industries, while ignoring the economical and health disasters they cause,” he said.

He said that in the past, the 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.

“Almost 90% of all brands consumed in Pakistan were taxed as ‘low’ tiers under the previous tax system (FY 2016-17). If their prices had remained the same, most would have automatically been reclassified as ‘medium’ (89% of them). However, we find that big tobacco companies made deliberate adjustments in prices resulting in a significant price reduction, causing 88% of the market being taxed at the new lowest rate in the current tax system,” he said.

Malik Imran said the loss of revenue due to introduction of low tobacco taxes is Rs77.85 billion from 2016 to 2019 and loss of revenue due to price adjustments is Rs75 billion from 2018 to 2019.

Khalil Ahmad, manager Research and Communication SPARC, shared that Pakistan is one of the 15 countries worldwide with the heavy burden of tobacco related ill health issues. He said around 1200 Pakistani children between ages of 6 to 15 years start smoking every day according to the Global Adult Tobacco Survey (GATS) results of 2015.