Karachi, May 19, 2020: The tobacco industry is causing an economic burden of Rs192 billion per year, whereas tobacco use causes over 166,000 deaths annually in Pakistan and increases the financial and health burdens of the users.
In an online press briefing session, Azhar Saleem, Human Development Foundation (HDF) chief executive officer, said on Friday the pre-budget time was crucial for policymakers and tobacco control activists for increasing the taxes on tobacco products.
In a recent media report, through a raid by tax officers on one of the abandoned factories of tobacco giant, found out that 60 million sticks of cigarettes were present at the location, all of which were illegally manufactured by the tobacco giant.
Meanwhile, tobacco industry claimed that illicit trade of cigarette is causing Rs44 billion in losses to national exchequer in a recent reports. Through a sponsored research study, the industry claims the illicit trade to be at 44 percent. In 2017-18, through a new tax structure, the tobacco industry caused a loss of Rs. 42 billion to the government revenues which is almost 50 percent of the revenues collected the year before.
Malik Imran, representative of Campaign for Tobacco Free Kids, stated that last year, in response to this claim of industry, two research studies were jointly conducted by the HDF, Pakistan National Heart Association and Fikr-e-Fardan Organization. Both the studies showed the volume of illicit trade of cigarettes to be at 10 percent to 15 percent. Recently, another study was conducted by ASTRA in 10 major cities of Pakistan which revealed that the volume of illicit trade of cigarettes is 16 percent. The study was conducted over seven months with a total of 8,589 sample packs of cigarettes as sample.
Another study by Social Policy and Development Centre found that the industry under reports its total production and evades taxes as a result. The undocumented cigarettes are being sold by the industry in black market, with the intention to increase illicit trade. The industry claims that illicit trade increases whenever the prices of cigarettes are increased through higher taxes.
These studies and investigations necessitate the implementation of a transparent and fair track and trace system which will help in reducing the illicit trade of cigarettes. Through this under reporting, the industry caused a loss of Rs37 billion in 2016-17 in government revenues.
Mr Saleem urged the government not be influenced by these tactics of the industry and increase the taxes on tobacco products as this a time and again tested as effective tobacco control measure throughout the world. Higher taxes on tobacco will lead to more revenues and limit the access of youth to this deadly product.
