Tobacco's Detrimental Impact On Pakistan's Economy

Tobacco's Detrimental Impact On Pakistan's Economy
The negative contribution of tobacco to Pakistan's economy was discussed during an event organized by the Society for the Protection of the Rights of the Child (SPARC) in collaboration with the Federal Board of Revenue (FBR) and elected representatives. The event aimed to shed light on the economic implications of tobacco, the burden it places on public health, and the tactics employed by the tobacco industry. Key journalists were present to garner support for the Federal Board of Revenue's (FBR) track and trace system.

Malik Imran, Country Head of the Campaign for Tobacco-Free Kids (CTFK), emphasized that the tobacco industry has caused a staggering economic burden of 615 billion rupees in our country. Consequently, heavy and regular taxation of tobacco products is necessary. Imran highlighted the government's decision to increase the Federal Excise Duty (FED) on cigarettes in February 2023, which resulted in additional revenue of 11.3 billion rupees from FED and 4.4 billion rupees from VAT in the fiscal year 2022-23. This additional revenue constitutes 0.201% of Pakistan's GDP, providing a significant boost to the struggling economy. Imran pointed out that the tobacco industry's claims of illicit trade are mere excuses to evade taxes. In reality, they engage in underreporting, concealing their actual production figures to avoid taxation. Cigarette manufacturers also pass the tax burden onto consumers to enhance their own profitability.

Mr. Rizwan Sarfraz, Additional Project Director of the Track and Trace System at the FBR, highlighted the achievements of the track and trace system implemented by the Federal Board of Revenue in Pakistan. These accomplishments include technology-based monitoring, increased transparency, improved tax compliance, and a reduction in the prevalence of counterfeit goods in the country. He mentioned that cigarette production declined by 6.5% from July-December 2021 to July-December 2022, while FBR's tax collection during the same period increased by 11.75%. This is a significant milestone for the Track and Trace System.

Nisar Ahmed Cheema, a Member of the National Assembly, emphasized the need for all stakeholders to work tirelessly to safeguard the health of Pakistanis at all costs. He called for the implementation of FBR's track and trace system in all companies to prevent the loss of crucial tax revenue. He also urged parliamentarians to strive for consistent and substantial increases in tobacco taxation.

Dr. Ziauddin Islam, Former Technical Head of the Tobacco Control Cell at the Ministry of Health, emphasized the need for sustainable measures to address the annual toll of 337,500 deaths attributed to tobacco and the economic burden of 615 billion rupees. He recommended regular increases in tobacco taxes as a means to reduce consumption and generate revenue.

Khalil Ahmed Dogar, Program Manager at SPARC, emphasized the importance of setting aside differences and uniting to protect children and youth from an industry that is causing billions in losses to the national exchequer. Regularly increasing tobacco taxes is a crucial step in this regard.