Tax the tobacco

Pakistan stands among the top four countries where there has been a rising use of tobacco. In Pakistan, an estimated 40 percent males and nine percent females are smokers, and the number is increasing day by day. The price of cigarettes in the country is one of the lowest in the world. For budget 2016-17, National Health Services (NHS) had recommended an increase in taxation on cigarettes, but the tobacco industry succeeded in ensuring that there is only a small increase in prices. The decision was shocking for both the NHS as well as the civil society as it comes in the wake of World No Tobacco Day celebrated on May 30. The increase is so meager that it would not even affect the consumers. Members of civil society have declared the increase in taxes eyewash, as it is highly unlikely that it would help in decreasing tobacco consumption. Furthermore, the increase in taxation could have helped the national exchequer as well as discouraged the country’s youth against the habit. The finance ministry seems to have ignored the study quoted by the NHS, which stated that the recommended step could cut the tobacco consumption by 13 percent as well as increasing government revenue by Rs 40 billion. There are two slabs for cigarette products: products with a retail price lower than Rs 72 are ranked in lower slab while the rest is ranked in the upper slab. The current tax on lower slab, which is the market of 80 percent users, is taxed Rs 28.40 on a packet of 20 cigarettes. Against the recommendation of the NHS to increase the tax to Rs 44, the ministry of finance has only increased by Rs 4.58. Moreover, the tax on the upper slab is increased by only Rs 11 rupees. In a rather shocking move, the upper limit of the lower slab up to Rs 88 from current Rs 72 is to be implemented in two phases.

The tobacco price in Pakistan as compared to the US, European countries and even in Asia is one of the lowest in the world. A particular brand pack costs 10 times in the US to what it costs in Pakistan. May 30 has been marked by the World Health Organisation (WHO) as the World No Tobacco Day. WHO has launched a number of initiatives to curb tobacco consumption and the most efficient method that has proven effective in controlling tobacco use is the increase in taxation as well as the promotion of the health hazards it causes to smokers as well as nonsmokers. According to recent studies, tobacco kills approximately six million people around the world every year, of which 600,000 are non-smokers affected by passive smoking.

The Asia-Pacific region represents the fastest growing tobacco market in the world with Malaysia, Indonesia, Vietnam, and Pakistan topping the charts. WHO has recommended at least 70 percent tax on cigarettes but in Pakistan, it is 61 percent even after the current increase. The current taxation rates are too low to discourage smoking in the youth. Furthermore, steps taken by government are not enough to curb the increasing trend of smoking. Government should not succumb to the pressure of tobacco companies against advertisement of health hazards on cigarette packs. The current steps from government are not encouraging as neither have they matched the recommendations of WHO, nor do they match the worldwide standards to decrease the effect on the non-smokers. On World No Tobacco Day 2016, WHO has recommended plain packaging of cigarette packs, which kills the glamour of packs in addition to impacting human behaviour. The implementation of these strategies is vital to curb the alarming rise of tobacco consumption in Pakistan.*

Resource: http://dailytimes.com.pk/editorial/06-Jun-16/tax-the-tobacco