Media session highlights need for enforcement of health levy on cigarettes

ISLAMABAD: Media session arranged by Human Development Foundation (HDF) on Wednesday highlighted the need for enforcement of health levy bill on cigarettes.

Speaking on the occasion, Azhar Saleem, CEO HDF, said tobacco use has a significant economic cost, including the health care costs for treating tobacco related diseases and the lost productivity of the workforce.

The annual economic cost of smoking in Pakistan is as high as Rs 143 billion, he claimed. He said higher taxes on tobacco products create a win-win situation, in terms of increased revenues for government and improved public health as tobacco consumption reduces.

He said countries like Philippines have implemented health tax on tobacco products which has resulted in a sustainable source of funding for the national health care programs.

Sajjad Cheema, Executive Director SPARC, said it is imperative to save youth and children from tobacco. The most effective measure in this regard is the higher prices of tobacco products.

According to him with higher taxes and the proposed health levy, the prices of cigarettes will increase which will limit access and ultimately reduce the overall consumption by all, particularly youth.

Malik Imran, Representative of Campaign for Tobacco Free Kids (CTFK) emphasized that taxation has a proven effective measure to control the growing consumption of tobacco.

He repeatedly mentioned that it has almost been a year that Health Levy bill was approved by the Cabinet yet it was not included in the Financial Bill 2019-2020 due to the hidden interests and influence of Tobacco Industry. Sadly, the government is still dragging its feet to implement it, he added.

Waseem Saleem, Senior Economist at Social Policy and Development Centre (SPDC) said that the large fiscal imbalances in Pakistan require greater tax revenues. He added that the level of under-reporting of cigarette production in Pakistan has negative implications for government tax revenue.

Revenue loss due to undeclared production is estimated at Rs 31 billion while by including GST revenue, it becomes Rs 37 billion (considering the average FED rate of Rs 1.93 per cigarette in 2016-17, calculated by dividing total revenue by the volume of sales). He stated that tobacco taxation will positively contribute to government revenues, ultimately promoting the government’s public health objectives.

The session was joined by HDF partners from civil society like PANAH, SPARC and media persons.

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