Pakistan need a clear strategy for using tobacco taxation to preserve public health while also increasing income, and the lack of such a policy has resulted in a loss of Rs 567 billion over the past seven years.
The Indus Broadcasting Corporation (IBC) has revealed the catastrophic loss to the national exchequer in a policy paper titled Rethinking Tobacco Taxation in Pakistan: A Call for Immediate Reforms.
The report cited the Federal Board of income’s (FBR) income projections for the tobacco sector as well as the tax collected during the previous seven years.
The IBC has advised that the government match its tobacco taxing strategy with WHO principles and protect it from corporate influence. “Prioritize public health over industry interests, recognizing the health and economic burden of tobacco consumption,” according to the strategy paper.
“Federal Excise Duty (FED) on cigarettes, a major source of tobacco taxation, has been manipulated by powerful businesses to safeguard their interests at the expense of public health,” the report added.
According to the IBC, the lack of a defined tobacco taxation plan, as well as the cigarette industry’s disproportionate influence, are major causes to this economic disaster. The implementation of a three-tier structure in 2017, ostensibly to combat illegal trade, was a reflection of industry’s influence over decision making.
Sharing information and circumstances that influenced the decision to implement a three-tier structure, the IBC stated that multinational corporations utilized deceptive techniques, such as overstated estimates of illicit trade, to persuade the government.
However, the World Bank disproved the grandiose claims about the illicit trade in a report, according to the newspaper.
Similarly, a study undertaken by the Pakistan National Hearts Association (Panah) found that the illicit cigarette trade in Pakistan accounts for no more than 9% of the total.
The IBC also alluded to investigations started by the National Accountability Bureau (NAB) against the loss to the national exchequer in 2018, and the Auditor General of Pakistan’s position regarding the ulterior intentions behind the introduction of third-tier and phony numbers of illegal trade.
