TheNetwork for Consumer Protection has conveyed to Chairman Federal Board of Revenue (FBR) Tariq Bajwa that the leading cigarette manufacturing giant is misleading the tax authorities about expected revenue shortfall and distorting facts under cover of new graphical health warning (GHW) on cigarette packs.
In a communication to the FBR here on Thursday, Nadeem Iqbal, Executive Co-ordinator of The Network for Consumer Protection - an NGO - said that there is nothing in the laws, or the Constitution which prevents the Federal Government from regulating the tobacco industry. The FBR should reject the letter of the cigarette manufacturing company as it is making an attempt to influence the government institutions for its interests, Nadeem Iqbal added. He said that Rights group TheNetwork for Consumer Protection has sent a letter to the Chairman of the FBR contesting the contents of a letter sent by a tobacco company.
In the letter dated February 25, 2015 the cigarette manufacturing company's top official had warned the FBR a major shortfall in revenue collection in case new graphical health warning (GHW) on cigarette packs is adopted. Reportedly, the company's official has given a number of reasons as to why a pictorial health warning with an increased size (85%) of the cigarette packs is detrimental for the government's tax collection targets. It claims adopting such warnings will also lead to increase in the sale of smuggled cigarettes.
TheNetwork for Consumer Protection, as a tobacco control advocate, has its own contention regarding the content of the letter by a cigarette manufacturing company to the Federal Board of Revenue, Nadeem Iqbal said. The communication is self-contradictory as on one hand, it says the new GHW will have a negative impact on the government's revenue collection drive but at the same time it admits that GHW makes little difference in overall tobacco consumption, arguing "there is no consistent and credible evidence that extra large GHWs will have any discernible impact on reducing or discouraging tobacco use," Iqbal said.
With regard to linking adoption of health warnings to an increase in smuggling of illicit cigarettes, pictorial health warning has nothing to do with smuggling of illicit tobacco. Smuggling is an enforcement issue and should be seen in isolation from tobacco consumption.
The industry goes on to state that raising the size of the Graphical Health Warnings will affect its right to freedom of trade. However, it may be mentioned that freedom of trade embodied in Article 18 is not an absolute right and is subject to qualifications prescribed by statutory law. Right to free trade cannot be given precedence over fundamental right to life under Article 9 of the Constitution. Nadeem Iqbal said that it is scientifically established evidence corroborated by the World Health Organisation (WHO) that warning on cigarette packs reduces significant number of youth from initiating tobacco smoking and helps smokers to quit smoking thus reducing the burden on health and economy.
As far as jurisdiction of provinces on the subject of health is conceived, this is not an issue that falls within the jurisdiction of the FBR. It seems the industry has generated this debate only to divert the attention of the authorities and to delay regulations in this context.
Since Pakistan is a signatory to the WHO treaty, the Frame Convention on Tobacco Control, 2004, the federal government is under obligation to regulate the tobacco industry and it does so in line with the constitutional provisions of Entry 3 and 32 of the Federal Legislative List [Fourth Schedule]. Furthermore, the subject of tobacco regulations including health warnings on cigarette packs relates to implementation of the treaty. The federal government alone is competent to implement the provision of the FCTC at the national level to safeguard millions of lives. It leaves absolutely no doubt about the federal government's competence to legislate on tobacco and other related matters, Nadeem Iqbal said.
The state owes a duty towards its people in the regulation of tobacco industry in line with the globally accepted principles. Moreover, it is a sub judice matter and the cigarette company has already moved SHC in this matter. The Sindh High Court has not given any direction to the government not to bring any tobacco regulations in the country.
In line with the above, it is reiterated that there is nothing in the laws, or the Constitution which prevents the federal government from regulating the tobacco industry, Nadeem Iqbal maintained. Moreover, the rotation of pictorial health warning was due since 2010 on a yearly basis and adopting of the new warnings is in line with the spirit of the FCTC. The industry's demand from the FBR to prevail on the Ministry of Health to "rescind the intention of issuing the proposed regulation" is beyond its mandate.
Unfortunately, the industry has based its thesis of increase in illicit tobacco trade and loss to national exchequer due to smuggling of cigarettes on an academically weak report to peddle the public authorities on its own favourable terrain through economic arguments, he stated. Under the above-mentioned circumstances, it is therefore requested that the FBR should instantly reject the communication and snub the industry for taking liberty to try to influence the government institutions for its interests, Nadeem Iqbal concluded.
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