Govt fails to collect required tax from cigarette industry

ISLAMABAD   -   A Pakistani think tank’s recent study unveiled that govern­ment failed to meet any tax collection targets from the cigarette industry over the past seven years. Accord­ing to the study conducted by Sustainable Development Policy Institute (SDPI), the FBR missed the targets since 2017 after introduction of third-tire. The decision to introduce the third tier was taken by the then govern­ment under influnce of mul­tinational cigarette compa­nies. The country lost Rs 567 billion potential revenue in last seven years due to loop­holes in policies. Talking to media, country head Comp­gain for Tobacco Free Kids (CTFK) Malik Imran said PML-N last government in­troduced third tier due to the pressure of two big cigarette companies. He demanded the government to initiate inquiry on the basis of the report and take immediate action against these compa­nies. Researchers and ana­lysts have demanded urgent attention and comprehensive reforms to navigate through these challenges and counter the influence of these pow­erful cigarette industry gi­ants. The SDPI study has also shed light on the dynamics of the cigarette industry and its strong influence. The study also highlighted how high and middle-income countries successfully imposed high taxes on cigarette products to decrease consumption and increase government rev­enues, but Pakistan lacks a clear strategy on using ciga­rette taxation and prices as a public health tool. According to details, multinational ciga­rette companies pushed au­thorities to introduce a three-tier excise duty structure in 2017, while shifting the focus on revenue collection and ignoring adverse effects on public health. However, it was later proved that the target of collecting more rev­enue through introduction of the third tier was also missed and was grossly misleading. It was the time cigarette pric­es in Pakistan were lowest in the world which fueled the consumption and ultimately put burden on the country’s fragile healthcare system.

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