ISLAMABAD: Experts at webinar titled “Tobacco Taxation: Nostrum to the Ailing Economy” on Monday (6th of Feb 2023) called upon the government to increase tax on tobacco products by 70 percent of their retail price which was crucial to increase revenues in the face of an ailing economy.
The webinar was organized by Sustainable Development Policy Institute (SDPI) as Director Resilient Development Program (SDPI) Dr Shafqat Munir said Pakistan ranked as the tenth highest tobacco-consuming country, which needed immediate attention from the government.
Upholding the idea of 70 percent increase in tax on tobacco products, he urged the government to revisit the fast-track progressive taxation regime on tobacco to support the economy and reduce the incidence of tobacco-related diseases.
Managing Director of Social Policy and Development Centre (SPDC) Asif Iqbal suggested for adopting the medium-term tax policy to reduce speculation and data manipulation in the tobacco industry and ensure fair taxation for all.
According to current estimates, up to a 70% increase in tax can generate over Rs 65 billion in revenues, he added.
Joint Executive Director SDPI Dr Vaqar Ahmed suggested that the brand registration fee structure should be increased and the registration must be renewed annually and the tax collection should be imposed in advance, which would not only guarantee higher revenue generation but help to discourage consumption.
He further suggested that tobacco cultivation should be taxed to bring tobacco farmers in the tax net and discourage farming.
Senior Research Associate SDPI Wasif Ali Naqvi said that 170,000 annual deaths were caused by tobacco along with cardiovascular and respiratory diseases, and cancers.
Against the global decline in tobacco consumption, Pakistan had 24 percent consumption rate and 10.7 percent of youth ageing between 13-15 indulge in smoking.
He said that underreporting by the tobacco industry from 2015-18 cost the country $143 to $448 million each year.
He said that only two tobacco companies pay 98% of the entire tax while the remaining cumulatively pay 2% of the tax.
The volume of illicit trade increased from 23% to 40% from 2018 to 2020 and policy inconsistencies had been at the centre of the revenue losses, he added.