ISLAMABAD: The Society for the Protection of the Rights of the Child (SPARC) organised a dialogue session on the need of smart decision-making to revive Pakistan’s economy by raising taxes on tobacco products. The session titled “Tobacco Taxation: big source for huge revenue” was organised at a time when Pakistan has seen unprecedented hike on petroleum, gas and electricity prices and government is struggling to keep the subsequent rise in cost of commodities in check.
Malik Imran, Country Head for campaign for Tobacco Free Kids, said that Prime Minister Shehbaz Sharif and his cabinet members have repeatedly stated that the government won’t shy from taking unpopular decisions to strengthen Pakistan’s economy. In order to fill the state’s coffers, government has tried raising petroleum prices and reducing imports but one of the biggest sources of revenue remains untapped.
Malik Imran alluded to tobacco taxation which has remained stagnant in Pakistan for the last four years. He mentioned that the use of tobacco causes annual an economic burden of Rs 615 billion which is 1.6 percent of Pakistan’s GDP. On the other hand, the revenue generated from the tobacco industry is Rs 120 billion. This situation calls for an immediate increase because in Pakistan, tobacco products are being sold at lower rates compared to other South Asian countries.
Khalil Ahmed Dogar, Programme Manager, SPARC said the there’s no justification for not raising taxation on tobacco products which are non-essential and hazardous items and cause 170,000 deaths every year. On an average, Pakistani smokers spend 10 percent of their average monthly income on cigarettes. Due to cheap and easy affordability nearly 1200 children begin smoking every day in the country. A struggling economy such as Pakistan can’t afford this much loss of precious human and finance resources. Therefore, tobacco products should be heavily taxed as it is the most effective strategy to safe public health and generate revenue.
Shariq Mahmood Khan, CEO, Chromatic Trust, stated the according to the government all of the price increment decisions have been taken in the light of Pakistan’s international commitments. Shariq stated that Pakistan is a signatory of WHO Framework Convention on Tobacco Control which has repeatedly recommended Pakistan to increase taxation on tobacco products in accordance to inflation. The government needs to implement this recommendation which will not only generated much needed revenue but also reduce tobacco consumption.
Copyright Business Recorder, 2022