Sparc hails uniformed tax on tobacco

Islamabad: Health activists have thrown their support behind the International Monetary Fund (IMF) recommendations for Pakistan, with a specific focus on restructuring tobacco taxation. During the event “Fuelling Economic Growth through Increased Tobacco Taxation” organised by the Society for the Protection of the Rights of the Child (SPARC), activists urged the Government of Pakistan to transition to a Single Tier Tobacco Taxation System, thereby eliminating the second tier. This strategic move is deemed essential not only for boosting revenue but also for relieving the healthcare cost burdens imposed by tobacco-related illnesses.

Malik Imran Ahmed, Country head Campaign for Tobacco Free Kids (CTFK), highlighted the alignment between the IMF’s recommendations and the ongoing discussions with Pakistan. These discussions aim to tackle the nation’s fiscal and external sustainability weaknesses while fostering economic recovery and inclusive growth. A key component involves strengthening public finances through gradual fiscal consolidation, broadening the tax base in undertaxed sectors, and improving tax administration to enhance debt sustainability. Imran emphasized the urgent need to tie these objectives with tobacco taxation, stressing the imperative of reforming Pakistan’s cigarette taxation system.

Malik Imran further emphasized that revitalizing Pakistan’s cigarette taxation system transcends mere fiscal considerations; it is a matter of urgent public health concern. He lamented that despite the substantial taxes imposed on cigarettes, the revenue generated falls short of covering the healthcare costs incurred due to smoking-related illnesses. In the fiscal year 2022-23, taxes covered a meagre 16% of these expenses, indicating a significant decline from 19.5% in 2019.