IBC for aligning tobacco taxation policy with guidelines of WHO

ISLAMABAD   -  – Pakistan needs a clear strategy for employing to­bacco taxation as a tool to protect public health and boost revenue and absence of a clear strategy results in a loss of Rs 567 billion in past seven years. Indus Broadcasting Corporation (IBC) has exposed the stag­gering loss to national ex­chequer in a policy paper titled Rethinking Tobacco Taxation in Pakistan: A Call for Immediate Reforms. The study has quoted Federal Board of Revenue (FBR) revenue targets from the cigarette industry and the tax collected in seven years. The IBC has recom­mended the government to align the tobacco taxation policy with the guidelines of WHO and safeguard it from the industry’s influ­ence. “Prioritize public health over industry inter­ests, recognizing the health and economic burden of tobacco consumption,” the policy paper recom­mended. “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,” it said. The IBC said that lack of a clear strategy on tobacco taxation and the undue influence of the cigarette industry have been iden­tified as key contributors to this economic setback. Introduction of a three-tier system, introduced in 2017 ostensibly to con­trol illicit trade, was the manifestation of industry’s influence over decision making, it added. Sharing details and factors behind the decision of introduc­ing three-tier system the IBC said multinational companies used deceptive tactics that include exag­gerated estimates of illicit trade to convince the gov­ernment. However, the tall claims regarding the illicit trade were debunked by the World Bank in a report, the paper said. Similarly a research conducted by Pakistan National Hearts Association (Panah) has revealed the fact that illicit cigarette trade is not more than 9% in Pakistan.

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