Increase in tax on tobacco can generate funds to combat COVID-19: Report

Mamoon AhmadAssociate Copy Editor

03rd Apr, 2020. 08:42 pm

Pakistan is amongst the developing countries with a very high tobacco prevalence and high mortality rate, where above 166,000 people die of tobacco-related diseases every year in Pakistan.

70 per cent of those get damaged lungs due to second-hand smoke at indoor places. If these stats weren’t alarming enough, the current global pandemic of COVID-19 also known as Corona Virus has further burdened the public health of the country.

According to World Health Organization, smokers are at a high risk of suffering from severe symptoms of coronavirus due to an already compromised respiratory system.
Unfortunately, the virus which has affected the entire world has no vaccine at the moment and is only expected to come about 12 – 18 months later. The pandemic has further burdened the healthcare system of developing countries like Pakistan. Every rupee spent to counter this virus means that government is reducing the expenditure allocated to counter other diseases which still exist in the country.
Pakistan would have more funds available at hand if it wasn’t for the big tobacco industry which has not only increased the number of patients of respiratory diseases but also robbed the country of billions in taxes, by under reporting of their production, which could have been spent on health.

According to a recent report released by Social Policy and Development Center (SPARC, the tobacco industry has under-reported their production by 47% and 27% in fiscal years 2016-2017 and 2017-2018, respectively. Revenue loss due to under-reporting of production was Rs 37 billion.

Kashif Mirza, the Manager Media and communication says: “The myth that tobacco industry generates large source of revenue for the country has almost become a popular belief. On the contrary, from 2016 to 2019, big tobacco industry caused a monstrous Rs153 billion loss to the Pakistan. The industry enjoyed low tax rates (Rs 77.85 billion loss of revenue) and adjustment of the prices of their most selling brands (Rs 75 billion loss of revenue). 90% of the brands would have been taxed at higher amount if their prices weren’t adjusted. During last three years, big tobacco industry has produced 75% of the cigarettes but claimed to have produced much lesser to avoid taxes.”

Increase in tobacco prices as suggested by World Health Organization will not only reduce tobacco consumption but it will also generate additional tax revenue that can fund government health programmes related to respiratory diseases and epidemics such as COVID-19.

Adsense 300 x 250