Anti-smoking campaigners propose reforms in tobacco taxation

ISLAMABAD: Civil society groups campaigning against smoking on Thursday presented a new tobacco tax reforms model, and decried the tax collecting body for surrendering to the multinational cigarette manufacturers.

The new taxation model was presented by Malik Imran Ahmad belonging to ‘Campaign for Tobacco Free Kids’ in collaboration with Society for the Protection of the Rights of the Child (SPARC), Human Development Foundation (HDF) and Pakistan National Heart Association (PANAH).

The proposals included demand from the government to implement crucial measures to further strengthen the tax system, regularly increase the excise duty to reduce cigarette affordability, harmonise all taxes across tobacco products and fully implement the international protocol to eliminate illicit tobacco trade.

Malik Imran said the tax reforms model will also contribute to reduction in adult cigarette consumption by about 2.15pc from 10.4pc among adults in the next three years.

The civil society members predicted that the tax reforms were expected to generate an additional amount of Rs205.9 billion in over three years.

Meanwhile, talking to media Malik Imran blamed fall in revenue collections on Federal Board of Revenue (FBR) which benefitted the multinational cigarette manufacturing companies.

“FBR collected Rs114 billion in FED from cigarette industry in 2016 but it dropped to Rs84 billion the following year due to introduction of three tier taxation system,” Malik Imran said.

He added: “FBR forwarded the reason for the introduction of three tier system that it would reduce illicit cigarette trade which was around 40pc, but the independent reports suggest that illicit trade was only 9pc.”

He said that FBR totally relied upon the figures provided by the multinational companies, who in return benefitted from the three tier system under which tax rate was very low. The members of the groups expressed confidence that if recommendation on tobacco tax reform adopted by the government, it will help simplify Pakistan’s tobacco tax system.

It will also help reduce government’s administrative costs including enforcement and compliance and further align it with best global practices.