ISLAMABAD: The Society for the Protection of the Rights of the Child (SPARC) here on Friday organised a session with journalists to discuss the opportunity for the new government to generate revenue by increasing tobacco taxes.

During the session, Public Health experts recommended the new government to increase Federal Excise Duty (FED) on Tobacco Products by 30 percent to generate additional revenue that can be used for the well being of the people since the budget is a crucial challenge for the government.

Khalil Ahmed Dogar, Program Manager SPARC told the media that tobacco taxes were the most cost-effective tobacco control measure and the use of tobacco caused an annual economic burden of 615 billion which is 1.6 percent of Pakistan’s GDP. This leads to significant negative externalities, including high healthcare costs and lost productivity due to tobacco-attributable diseases. But contrary, the revenue generated from the tobacco industry is 120 billion in 2019 which is approximately just 20 percent of the total cost of smoking, he expressed.

He stressed that the health and economic costs of tobacco use were more than five times the tax receipts, even though the tobacco industry was a major taxpayer in absolute terms, the tax contribution of the tobacco industry was a small fraction of what tobacco consumption costs the government and society. Since taxes on tobacco didn’t interest the previous govt, it’s an opportunity for the sitting govt. to generate revenue by increasing taxes on tobacco and tame the deficit, he added.

Speaking to the participants, Dr Ziauddin Islam, former technical head Tobacco Control Cell (TCC), Ministry of Health said, the Tobacco industry misguides govt. over illicit trade and according to Tobacco Industry data in January 2021, illegal cigarette costs 40 billion to the economy and in February 2021, they quoted 77 billion without any justification whereas according to an Independent Report, illicit cigarette market is only 10 to 15 percent, he said.

He further added that tobacco use had direct and indirect effects on children’s health. Daily 1200 children initiate smoking and the increase in tobacco taxes will bring this number down, he told and added, raising taxation on tobacco is the most suitable measure of reducing tobacco use and associated health risks, especially among low-income populations.

Shariq Mahmood Khan, CEO of Chromatic Trust, said that the tobacco hazard could be controlled by increasing taxes as children were more price-sensitive and creating awareness. Recently, tobacco and related industries have increasingly preyed on children and adolescents, engaging in advertising tactics like sponsorships and influencer marketing to target them directly that threaten their health, he added. He appealed to the new government to raise awareness and help the Directorate of Health to implement tobacco control laws and increase tobacco taxes to reduce consumption and generate additional income.

Source: Business Recorder – April 18, 2022