Health Ministry recommends legislation to impose health tax on tobacco

ISLAMABAD: The Ministry of National Health Services, Regulations and Coordination has urged the Ministry of Finance to lay Federal Health Levy Bill in the Parliament to impose a health tax on tobacco and sugary drinks to increase the revenue and prevent non-communicable diseases.

Prime Minister Imran Khan’s Special Assistant on Health Dr Faisal Sultan, in a letter to the Ministry of Finance & Revenue, has urged to lay the Federal Health levy Bill before the parliament at an early date. He also emphasized upon the need to charge Rs10 per pack of 20 cigarettes health tax on tobacco and Re1 per 250 milliliter on carbonated drinks as approved by the federal cabinet on June 18, 2019.

Dr Faisal Sultan said the non-communicable diseases (NCDs) including heart disease, stroke, cancer, diabetes and chronic lung disease were collectively responsible for almost 68 percent of all deaths in Pakistan. He said NCDs were causing 51 percent of the total burden of diseases mostly in the young age group.

Pakistan is obligated to reduce one-third premature mortality from these diseases mainly caused by the tobacco by 2030 as part of its targets set in Sustainable Development Goals (SDGs), he said.

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He said the government could achieve the goal by decreasing the tobacco consumption among the youth through imposition of the health tax.

The imposition of health tax on tobacco and sugary drinks as per decision of the federal cabinet will prove as a catalyst to reduce the non-communicable diseases in the country, he said in the letter, adding that this would also help boost the tobacco revenues.

A recent study of the Tobacconomics, a collaboration of leading researchers who have been studying the economics of tobacco control policy for nearly 30 years, has revealed that Pakistan scored 0.88 points out of 5 on cigarette tax scorecard of 170 countries. This score is the lowest in the region.

In Pakistan, tobacco use is a cause of death of around 160,100 persons every year while almost 23.9 million adults currently use tobacco in any form in the country, according to the Tobacco Control Cell of the Ministry of National Health Services.

The health ministry said that the revenue generated through the health tax on tobacco and sugary drinks would be earmarked for the health sector’s development over and above its routine budgetary allocation.

The federal cabinet had earlier decided to include the provisions of the Federal Health Levy Bill in the Finance Bill, 2019, but this couldn’t become part of it due to some unknown reasons. The measures to check illegal manufacturing and illicit trade of cigarettes and tobacco were also to be incorporated in the Finance Bill.

Dr. Faisal Sultan has recommended the Ministry of Finance again to take immediate measures to lay the Federal Health Levy Bill before the Parliament at an early date to get it passed.

The Federal Ministry of Finance has already given a written assurance to the Federal Ombudsman for taking necessary steps for the implementation of the Health Levy Bill.

It should be noted that the cigarette manufacturers in Pakistan are highly influential within the Federal Board of Revenue (FBR) and the government. The three largest companies namely Pakistan Tobacco Companies have all shown increases in their profitability as reflected in their public filings. Despite pocketing millions, the companies allegedly exert pressure on the government to reduce taxes and avoid slapping the health levy on their products.

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Ahmad Ahmadani
The author is a an investigative journalist at Profit. He can be reached at [email protected]


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