Govt to impose health tax on cigarettes in upcoming budget

SAPM Faisal says health levy on cigarettes should have been implemented from the previous fiscal year, but it could not happen due to certain reasons

ISLAMABAD: The government is all set to implement health levy on cigarettes from the upcoming fiscal year to discourage smoking, boost revenues and reduce number of patients with diseases like cancer and diabetes.

Special Assistant to Prime Minister on Public Health Dr Faisal Sultan said that his ministry is working to incorporate a bill regarding health levy on cigarettes into the upcoming finance bill to implement it across the country.

He said the health levy on cigarettes should have been implemented from the previous fiscal year, but it could not happen due to certain reasons.

The federal cabinet had approved the health levy in June 2019, but it is yet to be implemented.

The delay in the implementation of the health levy is causing a loss of around Rs38 billion annually to the national exchequer in terms of low tax collection.

The special assistant has vowed not to accept pressure from any influential industry to further delay the imposition of the levy, adding that the levy would help collect additional billions of rupees in taxes that would be sufficient to improve health infrastructure in the country.

Earlier, in a letter to the ministry of finance, Dr Faisal Sultan had emphasised upon the need to charge Rs10 per pack of cigarettes and Rs1 per 250 millilitre of carbonated drinks as approved by the federal cabinet on June 18, 2019.

Sultan said the diseases like heart stroke, cancer, diabetes and chronic lung problem are collectively responsible for almost 68 per cent of all deaths in Pakistan.

Pakistan is aimed at reducing one-third of premature deaths, caused by the said diseases and tobacco, by 2030 as a part of its targets set in Sustainable Development Goals [SDGs], he said.

He said the government can achieve the goal by decreasing the tobacco consumption among the youth through imposition of the health tax.

Some officials in the ministry of national health services said that they have yet to hear back from the finance ministry on the health levy bill.

The imposition of health tax on tobacco and sugary drinks as per decision of the federal cabinet will prove as a catalyst to reduce the said diseases in the country, Sultan said in the letter, adding that this would also help boost the tobacco revenues.

In Pakistan, the use of tobacco is a cause of deaths of around 160,100 persons every year while almost 23.9 million adults currently use tobacco in any form in the country, according to the ministry of national health services.

It is pertinent to mention that the cigarette manufacturers in Pakistan are highly influential. The three largest manufacturers have shown increases in their profitability as per their public documents. Despite pocketing millions, the companies always exert pressure on government to reduce taxes and avoid slapping the health levy on their products.

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