ACCORDING to a report
launched recently, To
bacco industry focuses children and young students as their long-time customers and invests in them by giving various incentives and offering attractive packages.
Every year before budget, tobacco industry, raises false alarms and cautions the government against rise in smuggled cigarettes if it enhanced tax on the legal business of cigarettes.
This year too, the tobacco industry through various mediums has launched a similar campaign and the health right activists have given the government a wakeup call in this regard. The industry, they have said, is using tactics to scuttle official plans to make cigarettes inaccessible to children by raising tobacco tax in the upcoming budget.
Media reports suggest that the international tobacco industry has created a smoke screen with the deceptive statistics that the counterfeit tobacco industry has captured the market of the international tobacco companies.
Federal Board of Revenue, therefore, should introduce third tier with lower tax incidence that international industry can compete with counterfeit cigarettes instead of raising tax, the tobacco industry keeps reminding. TheNetwork for Consumer Protection, a not for profit organization spearheading tobacco control campaign in Pakistan has cautioned the government against the false propaganda of the tobacco industry reminding the authorities of the facts that state different scenario. According to the reports, international companies are on profit trail minting money at the cost of public health.
International companies pocketed a whooping 30 billion profit last year, says Nadeem Iqbal, CEO of TheNetwork.
He regretted that the entire statistics about cigarette production and sale are controlled by tobacco industry and it manipulates it while presenting to the government to get policies of its own liking to further its business.
According to media reports, tobacco industry has sold the statistics to Federal Board of Revenue that in Jan to April this year, its sales dwindles causing decrease in official revenue collection.
However, the fact of the matter is that cigarette production jumps up closer to budget when hoarding is done anticipating tax increase.
Already there exist two tiers of tobacco taxation wherein 90% consumed cigarette packs fall in lower tier with lower tax incidence and less consumed with higher taxes fall in upper tier. World Health Organization estimates, that cigarette prices in Pakistan are among the lowest in the world.
Historical data shows that reducing cigarette tiers and increasing Federal Excise Duty (FED) on cigarettes boost revenue as in 2012-13, when the tiers were reduced to present two, the contribution of cigarettes tax revenue to the Federal Excise Duty jumped up from 43.9% in 2011-12 to 50% next year.
According to report “Curbing tobacco use in Pakistan”, in 1990’s when cigarette price was at a decline in Pakistan, a significant 40% per capita increase of cigarette consumption was seen. On the other hand, during 2000-2004 consumption was reduced by 11% per capita due to increase in cigarette price.