Government urged to ease taxes on healthy products

LAHORE: Tax planners impose high taxes on tobacco, cigarettes and carbonated drinks to control the consumption of these unhealthy products, but it also imposes the same tax on healthy fruit juices and other products. The motive of the tax planners in Pakistan is to increase revenue even from segments that are harmful to health.

Take the instance of tobacco and cigarettes where taxes are increased every year despite constant rise in consumption. The government fails in enforcing laws that forbid smoking in public places.

We see law enforcers smoking on the roads and inside police stations; doctors can be seen smoking in hospitals where it should be completely prohibited; and commuters smoke in crowded public transport and trains.

We do not see people smoking openly at airports or in flights because the enforcement is strict. There are special smoking places in the passenger lounges where the cigarette addicts could inhale the tobacco.

The total number of tax paid cigarettes consumed in Pakistan was 32.27 billion in 1995, which increased to 46.96 billion cigarettes in 2000, 58 billion in 2011, 64.48 billion in 2014, and over 68 billion in 2016.

Experts estimate that for every rupee one that government collects in taxes, the medical treatment cost of the smoker is Rs1.50. This means that out of around Rs100 billion revenue collected annually from tobacco, the annual treatment of smoking related treatments is Rs150 billion.

The high tax rates have also encouraged smuggling of the cigarettes. This means that increased taxes should be accompanied by stricter regulations and their implementation in true spirit. For instance some countries have banned the marketing of cigarettes in attractive packing.

Some states have designed a simple packing and all cigarette brands have to be packed in the same design with the brand name. This will make it easier for the authorities to distinguish between the smuggled and locally produced cigarette brands. Moreover, smoking in public places should be severely penalised. The sales tax on carbonated drinks is understandable, as it is the main cause of diabetes, stroke or heart disease around the world. Diabetes and heart ailments are spreading very fast in Pakistan as well.

But the sales tax of 16 percent on carbonated soft drinks has not resulted in lowering the consumption that is constantly rising. The government has not even banned the sales of this injurious beverage at schools and in hospitals.

This will at least create awareness among the consumers about the diabetic threat that these beverages carry. The government should encourage healthy eating habits among the citizen that would reduce their health bill.

The state should exempt processed pure fruit juices from the sales tax, along with flavoured processed milk. In fact, flavoured processed milk should be allowed for sales in the school and hospital canteens. These products should not be subjected to ‘sin’ tax as they are not harmful to the consumers.

Though there has been no study on reduced use of sugar in Pakistan, a study in the United States concluded that if people reduced their sugary beverage consumption by 20 percent, they would save around $100 to $300 per year, plus higher savings in health expenditure.

Many experts are puzzled that despite knowing the adverse impacts of smoking and excessive sugar intake the consumers do not take it seriously. It is perhaps because the negative consequences appear a long time after consumption.

A youth dinking four carbonated beverages daily might remain healthy for years before the symptoms start manifesting. In the same way, a smoker may not have chest or cancer problems until late in life.

This is all the more reason for the state to hammer the minds of the citizens at an early stage of life. It is in human nature to ignore consequences that they might face late in life and give importance to what affects them immediately.