Dr Hamid says constant monitoring system on tobacco consumption is on the card

Islamabad:(May 24, 2021)- Federal Parliamentary Secretary for Health, Dr Nausheen Hamid, has said that the tobacco taxation and related health issues need constant monitoring systems and hence, the federal government is committed to come up with such systems. She said this while speaking at the webinar ‘Fiscal intervention for health policy; Advocating the case of imposing higher taxes on Tobacco regime,’ held by sustainable Development Policy Institute (SDPI), here on Monday.
She added further that tax evasion in tobacco industry results a loss of billions of rupees to the national economy. Therefore, a trace and track system, needs to be established urgently. Besides, stringent enforcement of the policy related to chewable tobacco products is also the need of hour, she added.
Dr Abid Qaiyum Suleri, Executive Director, SDPI, indicated the void in tobacco taxation policies. He added that the tobacco industry is aware of the impending Track and Trace System and is making all out efforts to delay it. Dr Suleri emphasized the need of tobacco taxation as it is one of the significant clauses of IMF program where Pakistan needs to abide by the commitments.
“As the federal budget is in the offing, the tobacco companies are advocating for a decrease on taxes on the tobacco products. However, the federal government has been in the mood to impose higher taxes on the tobacco products and bring these products under the trace and track system,” Dr Suleri maintained and added further that that a control on the illicit trade of tobacco products will play a key role in this regard.
Dr Suleri said that SDPI is in favor of the Two tier-taxation system, and keeping in view the Covid-19 pandemic, the revenue collected should be diverted to the health expenditure. He suggested that the chewable tobacco should also be the brought under the taxation regime as well.
Managing Director, SPDC, Dr Asif Iqbal, earlier, informed the participants that the three-tier system has been resulted as increase in the low-quality tobacco consumption in the country. He suggested that a 30% increase in the Federal Excise Duty (FED), will increase not only the tax revenue (19 billion) of the tobacco products but also drop the consumption rate (3.8 %).
Dr Iqbal said that “We need strict law regarding the illicit trade of the tobaccos/cigarette and a single tier taxation system in short to long term.”
Senior Research Economist, PIDE, Dr Mahmood Khalid; was of view that the tobacco taxation policy lacks evidence base data which hampers the overall policy framework.
Dr Samra Mazhar from Tobacco Control Cell, MoNHSR&C, said that tax imposition on tobacco is an international practice to reduce the use of cigarette in the country. Dr Wafa Aftab, from Agha Khan University, believed that there is a direct link between tobacco smoking and health complications. Therefore, prevention is the best way to reduce the expenditure on the health system, as 10% increase of tax on tobacco results in 2-8% reduction in its use.
Country Lead, The Union (Pakistan), Mr Khurram Hashmi, suggested that with the strong support of the of the federal and provincial govts along with independent think tanks can jointly take the agenda of higher taxation a successful culmination. Mr Shehzad Alam Khan, Representative of WHO, said that we need to take a holistic approach in approaching tobacco related policies and taxation regime. Besides, we need some voices in the parliament in support of the raise in taxation system as per WHO guidelines.
Dr Vaqar Ahmed; Joint Executive Director, SDPI, informed the participants that the government is keen to gather recommendations on taxation on the tobacco products. An independent Commission headed by FTO should be formed to evaluate the three-tier system proposed by FBR to collect federal excise duty on production and supply of tobacco products.
He suggested that a study on the role of evasion and avoidance should be conducted in addition to improved data on supply chain as well as the consumption, he added. Mr Wasif Naqvi, Senior Research Associate, SDPI, earlier, highlighted various aspects of the taxation and the consumption of tobacco.