Saturday May 18, 2024

Tax on non-essential items urged

April 16, 2024
A representational image shows a tax written on a calculator. — AFP/File
A representational image shows a tax written on a calculator. — AFP/File

Islamabad: Pakistan has been urged to overhaul tax machinery and to tax non-essential items including cigarettes to boost revenue and improve public health.

The International Monetary Fund (IMF) has given a set of recommendation and taxing non-essential items including cigarettes has received appreciation by health advocates and experts.

“This is a crucial time for the government to fix economic problems and implement the IMF recommendation,” said Professor Muhammad Zaman, head of Zaman Research Canter at Quaid-i-Azam University.

He said the IMF report has referred to a phenomenal study on this subject conducted by Capital Calling, an Islamabad-based think tank, which says the cigarette consumption has decreased due to increase in prices. He said there is a need to bring into account the cost of morbidity and mortality that smoking inflicts on the society.

“Smoking is injurious to health regardless of the cigarette brand,” he said. He pointed to critical flaws within Pakistan’s tax system particularly the cigarette industry, which have facilitated a loss of Rs567 billion during last seven years, as revealed by the Sustainable Development Policy Institute (SDPI).

The study further exposed the influence of multinational cigarette companies on policymakers, particularly evident in the introduction of a three-tier excise duty structure in 2017, which prioritised revenue collection over public health considerations.