Health Activists Appreciate PM's Measures To Curb Illegal Tobacco Trade

ISLAMABAD, (UrduPoint / Pakistan Point News - 2nd Jun, 2023 ) :The health activists Friday appreciated Prime Minister Shahbaz Sharif's directives to curb down illegal trade of tobacco products in the country.

In a press release of Society for the Protection of the Rights of the Child (SPARC), they mentioned that Federal board of Revenue's Track and Trace system controlled illicit trade from going above 15% level.

The health activist suggested to implement the system in all companies to achieve further benefits.

They also mentioned that during pre-budget seasons, tobacco industry used blown up percentage of illicit trade to influence the policymakers from raising taxation according to the rate of inflation.

Malik Imran, country head, Campaign for tobacco-free kids (CTFK), mentioned that tobacco induced disease caused an annual economic burden of Rs 615 billion which is 1.6% of Pakistan's GDP.

He said that an industry which was causing such unprecedented level of damage to public health and economy, brazenly claimed that any damage control move was against Pakistan's interest.

Imran mentioned that every budget season, tobacco industry used the illicit trade excuse to ensure that tobacco taxes were not increased.

This is a cover used by tobacco industry to divert people from the underreporting.

These companies under-report their production and then sell their non-reported products in the illicit market, causing billions of loss to the national exchequer.

He quoted findings of a latest research on illicit cigarette Pakistan which revealed the percentage of illicit packs of cigarette was around 15 percent.

Imran said that tobacco industry should not have any problems paying additional taxes as it never paid them from its own coffers.

Tobacco companies have increased their net-of-tax prices. Due to over-shifting, the excise tax share in retail price remains at 51.

6%, lower than the widely-accepted benchmark of 70%.

Dr. Ziauddin islam, Former Technical Head, Tobacco Control Cell, Ministry of Health, said that tobacco was the largest silent killer in the country as above 170,000 people died due to its use each year.

He explained that increased prices bring a decrease to production and consumption of tobacco which decrease the health cost burden.

Although there has been 31.7% decline in production of tobacco in fiscal year 2022-23 compared to the previous year which is win win condition, keeping in view of aim of tobacco control to decrease consumption coupled with increase in revenue generation.

He mentioned that due to the government's decision of increasing Federal Excise Duty (FED) on cigarettes in February 2023, an additional Rs 11.3 billion FED revenue was obtained in the fiscal year whereas additional 4.4 billion VAT revenue was obtained.

This additional Rs 15.7 billion revenue makes up 0.201% of our GDP which is a significant boost for the economy like Pakistan.

Khalil Ahmed Dogar, Program Manager (SPARC) said that the tobacco industry claimed that it does state-of-the-art research to present solutions to Pakistan's economic woes.

In reality, the only state-of-the-art thing, the tobacco industry produces was the killer products that were jeopardizing Pakistan's health and economy, he added.

Khalil mentioned that the Track & Trace System of the Federal Board of Revenue (FBR) provided an excellent opportunity for the government to tackle the issue of ever of taxes and illicit trade, which needed to be extended to all other cigarette manufacturing companies currently not integrated.

He further stresses the need for active tax administration by authorities to curb the existing burden of illegal production and sale of cigarettes.