Govt urged to impose long-delayed health tax

Anti-tobacco activists once again allege FBR's involvement behind the delay in imposition of health tax

ISLAMABAD: Health and tobacco control activists have urged the government to take notice of the delay in implementation of the ‘health tax’ on tobacco products and carbonated drinks that was approved by the Cabinet in 2019.

Addressing a press conference here at the National Press Club on Tuesday, Human Development Foundation (HDF), Society for the Protection of the Rights of Child (SPARC) and Pakistan National Heart Association (PANAH) asked the government to impose the tax which the government had claimed would generate approximately Rs50 billion in revenue almost two years ago.

Speaking about the delay in implementation, HDF Project Lead Syed Anis Bilal alleged that the Federal Board of Revenue (FBR) is responsible for playing with the lives of people as it had lobbied against the tax.

“Currently, the economic situation in Pakistan is unstable and the government is in need of revenues which can be utilised for financing government schemes such as a universal health coverage programme. Noncompliance in implementation of the bill cost the government a total of Rs55 billion in revenues last year. Revenue generated from the tax can be utilised for pandemic control and guarantee better health for our people,” he added.

Speaking on the occasion, PANAH General Secretary Sanaullah Ghumman shared that the association had found out that the bill has been going back and forth between the FBR, Health Ministry and Finance Ministry.

In this regard, he said the association had filed a petition after which a hearing was held by the federal ombudsman wherein the FBR shared in writing that it does not have any issues with the implementation of the health levy bill. Similarly, the Ministry of Finance has also given a written assurance for taking necessary steps for the implementation of the bill. However, no further was taken by the departments concerned.

Participants of the conference anticipated that the government will take instant notice of the delay in implementation of the health levy and open an investigation to determine why the decision of the Cabinet was not implemented despite the passage of almost two years.

Earlier on December 27, the Ministry of National Health Services, Regulations and Coordination had urged the Ministry of Finance to lay the federal Health Levy Bill in the parliament to impose a health tax on tobacco and sugary drinks to increase revenue and prevent non-communicable diseases.

In a letter to the Ministry of Finance, Prime Minister Imran Khan’s Special Assistant on Health Dr Faisal Sultan had emphasised the need to charge Rs10 per pack of 20 cigarettes and Rs1 per 250ml on carbonated drinks as approved by the federal cabinet on June 18, 2019.

“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 had stated.

It should be noted that the cigarette manufacturers in Pakistan are highly influential within the FBR and the government. The three largest companies in the country have all shown increases in their profitability as reflected in their public filings. However, despite pocketing millions, the companies allegedly exert pressure on the government to reduce taxes and avoid slapping the health levy on their products.

It is also pertinent to mention here that the country scored 0.88 points out of five on the cigarette tax scorecard, including 170 countries, according to a report released by The Tobacconomics in December 2020.

The report has suggested the government impose a uniform specific tax on cigarettes that comprises at least 70pc of the retail price and is automatically updated to stay ahead of inflation and income growth.

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

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