Govt fails to implement surcharges on tobacco, sugary drinks

--SPARC says Rs50bn could be collected from Rs10 surcharge on tobacco and Rs1 on sugary drinks to fight coronavirus

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ISLAMABAD: The government has failed to implement the cabinet’s decision pertaining to imposing a Rs 10 surcharge on tobacco products and Rs1 on sugary drinks.

This was disclosed by representatives of the Society for the Protection of Rights of the Child (SPARC) in an online interaction with journalists regarding tobacco taxation on Friday. Reporters were briefed about the potential source of revenue to bear the cost to fight the Covid-19 pandemic.

SPARC Executive Director Sajjad Ahmed Cheema said the civil society activists drew the attention of Prime Minister Imran Khan towards a decision approved by the federal cabinet to implement a surcharge of Rs10 on tobacco products and Rs1 on sugary drinks that remain pending to date.

The full implementation of both taxes could earn Rs50 billion in revenue that could be used to purchase personal protective equipment (PPE) for health workers and testing kits required for the pandemic, he added.

Malik Imran Ahmed of Campaign for Tobacco Free Kids Pakistan chapter said the government could immediately collect billions of rupees by revising taxes on just two products- cigarettes and carbonated drinks- and the generated revenue could be invested in the public health for fighting corona in the country.

He was of the view that both cigarettes and carbonated drinks had poor nutritious value as their sale trends showed a growing habit of smoking among youngsters and high consumption of soft drinks.

“Higher prices would not only discourage the youth from smoking, but also would encourage habitual smokers, who nowadays are at a higher risk of the coronavirus due to their reduced immunity.”

Ahmed further said the implementation on tax and price policies under national health objectives and Article 6 of the WHO Framework Convention on Tobacco Control (FCTC), would reduce the demand for tobacco.

Sanaullah Ghumman, the Secretary General of Pakistan National Heart Association (PANAH), said last year the government had 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, he added.

Had the surcharge imposed on cigarettes, the government would have generated about Rs40 billion per year in addition to the existing tax revenues, Ghumman said.

“Instead of relying on others, the government needs to adopt a futuristic approach and channelise additional revenues into situations where financial setbacks are faced such as the current pandemic. 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 could be overcome by imposing a surcharge on tobacco products.

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