Tobacco induced disease causes an annual economic burden of 615 billion which is 1.6% of Pakistan’s GDP, states SPARC, an Islamabad-based NGO, states in a recent report.
It says although tobacco industry is one of the major tax payers but the revenue generated from the tobacco industry is Rs120 billion. Therefore, the industry can’t claim that it is fulfilling the duty. Majority of the smuggled products belong to international companies operating in Pakistan. An industry which is causing such severe damage to people’s health and finances, should not use victim card that it is being ‘burdened’ by taxes. Capital Calling states that instead of listening to the misinformation spread by tobacco industry, everyone must appreciate government’s decision which is in interest of Pakistan’s health and economy.
The government, it urges, must be consistent about the decision it took on tax increase regarding tobacco products because existing tobacco taxes can generate 60 bn more in revenue.
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It says that tobacco industry is not provider for poor families etc. Reality is that the deadly products of tobacco industry are snatching people’s precious resources. It mentions that on average Pakistani smokers spend 10% of their monthly income on cigarettes. Therefore, this increase will make cigarettes go out of reach of low-income citizens and children, thus saving them for its harms.
It says that illicit trade is a harsh reality however its percentage is far less than the figure claimed by the industry. This is a cover used by tobacco industry to divert people from the underreporting. These companies under-report their production and then sell their non-reported products in the illicit market, causing a loss in billions of rupees to the national exchequer. Furthermore, illicit trade is not an excuse because industry is making deadly non-essential products. Consequently, it should have no qualms in paying the taxes. Two wrongs don’t make a right. Yes, the government needs to counter illicit trade but it also needs to increase the taxes on tobacco companies.
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Public health is supposed to be the top priority for the government. If cigarettes are injurious to health, as they are, the government needs to make their access harder for the masses, especially for children and youth, states Capital Calling, a network of academic researchers and professionals.
It urges the government to remain steadfast on its decision to double the Federal Excise Duty (FED) on cigarettes.
It says that the increase in taxes will go a long way to solve Pakistan’s financial dejection. It says attempts are being made to mislead the government into rolling back this decision.