By Syeda Sana Rasool
The government has made a positive move by putting FED on cigarettes, which will not only create extra income but also reduce smoking in society, according to Capital Calling, a network of academic scholars and professionals.
It thanked the government for raising the FED and urged it to resist pressure from international corporations.
According to Dr. Hassan Shehzad from the IIUI, the sale of illegal cigarettes has drastically decreased since the implementation of a track and trace system, therefore the propaganda that increasing prices will encourage smuggling is nothing more than unfounded accusations.
According to early results of a recent survey, there is hardly any amount of illicit cigarette commerce, he stated.
Preliminary findings of a recent survey have shown that volume of illicit trade of cigarettes is negligible, he said.
A report, stating, “Multinational cigarette makers are deliberately spreading the propaganda in the market that volume of illicit trade is increasing after the rise in taxes on cigarettes, which is a misplaced argument.”
The report further mentions that “there has been an increase in revenues of international cigarette brands this year according to their own reports”.
“Track and trace system has been implemented fully and no industry is now able to do illegal business,” he stated, referring to the report.
It is estimated that cigarette consumption has plummeted after the recent taxes on tobacco. He said due to the decline in consumption, health cost of cigarettes is expected to come down to one billion dollars from over three billion dollars annually. At the same time, the revenue that the government will generate will be touching the figure of Rs250 billion. Both these indicators are positive for Pakistan.
Sanaullah Ghumman, from PANAH, said that the government should keep on increasing tax on tobacco products regularly as per guidelines by the World Health Organization (WHO).
Khalil Dogar, from SPARC, said that it is deplorable that tobacco industry is putting up illicit trade of cigarettes as an excuse to seek undue tax favors for production of a non-essential good, states Capital Calling, a network of academic researchers and professionals.
He states illicit trade is there in the market but the volume of taxes and health levy should be at a par with global market.
He states that percentage of illicit cigarettes is far less than the figure claimed by the industry. This is a cover used by the tobacco industry to divert people’s attention from underreporting.
It cites a report stating, “These companies underreport their production and then sell their non-reported products in the illicit market, causing a loss in billions of rupees to the national exchequer. Furthermore, illicit trade is not an excuse because the industry is making deadly non-essential products.”
It says that illicit trade cannot justify tax favors as two wrongs don’t make a right.
It states that the government needs to counter illicit trade as well as increase the taxes on tobacco products.
In another report, Khalil Ahmed from Protection of the Rights of the Child (SPARC), had mentioned that increasing the FED in February was a good step that shouldn’t remain a one-time activity. Keeping the World Health Organization’s recommendation in consideration, Pakistan should increase taxes at regular intervals so that inflation and per capita income are accounted for and Pakistanis remain protected from the harms of tobacco products.
SPARC stated that this increase can be a step towards solving Pakistan’s financial dejection, provided that the government is not misled by the tobacco industry’s misinformation campaign.
Therefore, the industry can’t claim that it is fulfilling its duty, states Capital Calling.
WHO Guidelines And Tobacco
By Syeda Sana Rasool