Tax reforms urged to control tobacco consumption

ISLAMABAD   -   Supporting the remarks of IMF for more reforms in taxation system in Pakistan to improve economy, health experts have called for taking immediate and result oriented policies especially on tobacco sector in order to plug in massive tax evasion but also reduce health costs.

The IMF advice is based on its February report titled “Tax Policy Diagnostic and Reform Options,” which highlights Pakistan’s tax system’s underperformance in revenue generation, efficiency, equity, fairness, and sustainability. The report underscores the need for structural reforms to tackle deep-seated issues in the tax regime.

“Taxing tobacco is the way forward. It is a win-win position for public health and for generation of revenue for the government,” said Malik Imran Ahmed, Country Head of Campaign for Tobacco Free Kids (CTFK), while referring to increasing the tax base.

He said that implementation of the IMF recommendations and jacking up the prices of cigarettes in Pakistan would push people to quit smoking and save hundreds of lives every year.

He said that despite the substantial taxes imposed on cigarettes, the revenue generated falls short of covering the healthcare costs incurred due to smoking-related illnesses.

He said that a change has been witnessed in past few years and the taxes on cigarettes have been increased substantially, but Pakistan still is a place where cigarettes are cheaper from the region.

The Social Policy Development Centre (SPDC) has also proposed 37% increase in FED on tobacco products arguing Pakistan can save as many as 265,000 lives, generate additional revenue of Rs37.7 billion and push 757,000 people to quit smoking through increasing the FED by 37 percent.

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