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‘Tobacco use has significant impact on healthcare cost’

By Our Correspondent
February 27, 2020

Islamabad : Tobacco use has a significant impact on the economic costs of a country, including the healthcare costs for treating tobacco related diseases and lost productivity of workforce.

The annual economic cost of smoking in Pakistan is as high as Rs143 billion. This was stated at a media session organised by Human Development Foundation (HDF) on Wednesday. The session was joined in by partners from civil society like PANAH, SPARC and media persons. The media session was held to highlight the growing need for enforcement of Health Levy bill on cigarettes.

Azhar Saleem, CEO HDF, shared that higher taxes on tobacco products create a win-win situation, in terms of increased revenues for government and improved public health as tobacco consumption reduces. He also added that countries like Philippines have implemented health tax on tobacco products which has resulted in a sustainable source of funding for the national health care programs.

Sajjad Cheema, Executive Director SPARC, stated that it is imperative for us to save our youth and children from tobacco. The most effective measure in this regard is the higher prices of tobacco products. He said that with higher taxes and the proposed health levy, the prices of cigarettes will increase which will limit access and ultimately reduce the overall consumption by all, particularly youth.

As Malik Imran, Representative of Campaign for Tobacco Free Kids (CTFK) has been rightly emphasizing that taxation is a proven effective measure to control the growing consumption of tobacco.

He repeatedly mentions that it has almost been a year that Health Levy bill was approved by the Cabinet yet it was not included in the Financial Bill 2019-2020 due to the hidden interests and misleading influence of Tobacco Industry. Sadly, the government is still dragging its feet to implement it, he added.

Waseem Saleem, Senior Economist at Social Policy and Development Centre (SPDC) said that the large fiscal imbalances in Pakistan require greater tax revenues. He added that the level of under-reporting of cigarette production in Pakistan has significant negative implications for government tax revenue. Revenue loss due to undeclared production is estimated to be Rs31 billion while by including GST revenue, it becomes Rs37 billion (considering the average FED rate of Rs1.93 per cigarette in 2016-17, calculated by dividing total revenue by the volume of sales). He stated that tobacco taxation will positively contribute to government revenues, ultimately promoting the government’s public health objectives.