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April 11, 2020

Higher tobacco taxation to help fight coronavirus

Islamabad

April 11, 2020

Islamabad : The Society for the Protection of the Rights of the Child (SPARC) on Friday organised an online session with journalists on tobacco taxation and a potential source of revenue to bear the cost to fight the Covid-19 pandemic.

Sajjad Ahmed Cheema, executive director at the SPARC, said the federal cabinet had ordered the enforcement of a surcharge of Rs10 on tobacco products and Rs1 on sugary drinks but the orders had yet to be followed by the authorities so Prime Minister Imran Khan should ensure the necessary action.

He said the full implementation of those taxes would earn the country Rs50 billion revenue, which could be used to purchase PPEs for health workers and testing kits required for the pandemic.

Mr Malik Imran Ahmed of the Campaign for Tobacco-Free Kids, Pakistan, said billions of revenue can be immediately collected by the government by revising taxes on just two products cigarettes and carbonated drinks and the generated revenue could be straight off invested in public’s health for fighting controlling corona pandemic in the country.

He added both cigarettes and carbonated drinks have poor nutritious value and the sales trends show growing habit of smoking among youngsters and high consumption of soft drinks.

“Not only higher prices discourage youth from initiating cigarette smoking but encourage current smokers to quit, who are nowadays at a higher risk to coronavirus due to their decreased immunity,” he said.

Malik further said implementing tax price policies that ultimately add to the national health objectives, which has already been provided in Article 6 of the WHO Framework Convention on Tobacco Control (FCTC), “Price and tax measures to reduce the demand for tobacco.”

He said efficient imposition of taxes on these can decrease people’s access as their consumption is injurious to health and is increasing health burden of the country.

Sanaullah Ghuman, Secretary General, Pakistan National Heart Association, said last year, the government announced a surcharge of Rs10 per pack of cigarettes.

However, the surcharge approved by the cabinet, was not presented in the Financial Bill 2019-20 and, therefore, could not be implemented. Had the surcharge imposed on cigarettes, the government would have generated about Rs40 billion per year in addition to the existing tax revenues.

He added that instead of relying on others, the government needs to adopt a futuristic approach and channelize the additional revenues into situations where financial setbacks are faced such as the current pandemic of coronavirus.

“This additional revenue will continue in lessening the financial crunch that the country is facing.”

According to health experts and advocates, the severe shortage of funds faced by Pakistan to combat the coronavirus can be overcome by imposing of a surcharge on tobacco products.