Hike in taxes on sugary drinks, tobacco urged

Islamabad:As Pakistan negotiates fiscal reforms with the International Monetary Fund (IMF), the Pakistan National Heart Association (PANAH) has raised concerns about the growing burden of diseases linked to sugary drinks and tobacco consumption saying the fiscal policies, such as increasing taxes on sugary drinks and tobacco, are evidence-based strategies to reduce consumption and mitigate the risk factors associated with obesity and chronic diseases like diabetes, stroke, heart disease, and kidney failure.

Referring to a news item, Major General (r) Masud ur Rehman Kiani, president of PANAH, said that any effort to lowering taxes on sugary drinks and tobacco contradicts to global best practices and scientific evidence. Over 85 countries have successfully implemented higher taxation on these harmful products to curb consumption and reduce healthcare costs. He added that Pakistan should strengthen its public health measures through fiscal policies rather than reversing critical measures already taken by the government of Pakistan.

Referring to a 2022 study conducted by the World Bank in Pakistan, he said that increasing the excise tax on sugary drinks by 50 per cent would lead to significant benefits. These include an annual average health gain of 21 Disability-Adjusted Life Years (DALYs) per 10,000 population, an economic value of health impact of USD 7 million, and an increase in tax revenue of USD 51 million. Furthermore, the imposition of a 20 per cent excise duty on sugary drinks in 2023 has already yielded substantial tax revenue gains within the first six months of the 2024-25 fiscal year, providing a boost to Pakistan’s economy. These findings demonstrate that increasing taxes on sugary drinks can have a dual benefit: improving public health while generating significant economic gains, he said. He said that imposing a federal excise duty on these products could help reduce their consumption and the risk factors associated with various diseases.