deadly tobacco

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KARACHI: The tobacco industry in Pakistan enjoys a thriving customer base, currently comprising at least 24 million active tobacco users in the country, News Bowl has learned.

According to a study titled “The Huge Economic Cost of Tobacco-Induced Diseases in Pakistan”, conducted by the Pakistan Institute of Development Economics (PIDE), the total costs attributable to all tobacco-related illnesses and deaths in the country , before the pandemic at the time, were 615.07 billion rupees. However, the tobacco industry’s total tax contribution, 120 billion rupees in 2019, was only about 20% of the total cost of smoking, according to the PIDE report.

Experts point out that the government can earn much-needed revenue by raising taxes on cigarettes rather than essentials like baby milk and other food items.

Shariq Mahmood Khan, CEO of Chromatic Trust, an organization working for socio-behavioral change and development in Islamabad, said News Bowl that according to tobacco economics in Pakistan, raising taxes to 70% would help half a million users quit smoking. “It will also reduce premature deaths among adult smokers. The revenue generated can be allocated to health care and should be used cautiously by the federal and provincial governments to improve the physical and mental well-being of the population, especially young people,” he said. It would also help increase people’s productivity, he added.

Speaking about socio-behavioral changes, he explained, “Fundamentally, as a nation, we have to realize which products are detrimental to the future of our young people. There are two things related to this that come to mind: physical violence and tobacco abuse. So there is at least some visible work being done to address physical violence through NGO work and legislation, but tobacco abuse is a serious abuse problem that goes unchecked,” he said. -he regrets.

The cigarette-selling system operates like an organized mafia that targets 1,200 minors every day, he revealed. “Now what can we do as a nation about this when the cigarette industry itself is inherently legitimate? We can demand more and more taxes on tobacco products so that our young people learn to distance themselves from this habit,” he suggested.

Smokers are helpless right now and we see them as victims too, he also said. “If we systematically place barriers to cigarette smoking as we have seen recently in New Zealand, then our future generations will become tobacco free. A new threat to Pakistan is the advertisements of new tobacco products that target women who cannot smoke the traditional cigarettes readily available to men. This has increased nicotine doses in women and the general population of Pakistan,” he said.

Khan revealed that there is also a bin space available in this nicotine pack so that disposal is not a problem for confined smokers. “As this product is hands-free, you can simply place the pouch in your mouth and no one knows your nicotine intake, making it easier for people to engage in this activity and harder for loved ones to stop them. No additional tools are required for this product and it is odorless, so consumers can get away with it completely.”

This is a systematic way to target more and more women and minors, he said. “And this health crisis has only gotten worse since the current government chose not to raise taxes on these products for the past three years. The same taxes were imposed on child support. So, is children’s food or tobacco consumption more important to this government? he asked.

There are reports that the costs of tobacco use are high in terms of negative impacts on the economy and public health. Immediate action is needed to tax tobacco to generate additional funds for public health. A World Bank (WB) Group report titled “Pakistan: Overview of Tobacco Use, Tobacco Control Legislation and Taxation” showed that in May 2019, the government decided to impose a health worth 10 rupees on a pack of cigarettes within the budget. for fiscal year 2019-20 (FA). However, later, the health tax was unfortunately ignored.

In 2013, Pakistan adopted a new tobacco taxation policy at two specific levels; then excise rates were steadily increased between 2014 and 2016. Cigarette prices rose and, despite the substantial reduction in tobacco affordability, cigarette production remained almost unchanged, the report found. of the BM.

Total income increased by 50% in nominal terms, or 30% in real terms in three years and the situation changed dramatically in May 2016, the report says.

Between May 2016 and May 2017, average monthly cigarette production was 50% lower than in previous years. During the 2016-2017 fiscal year, nominal revenues decreased by 27% and real revenues by 30%.

Khalil Ahmed, program director of the Society for the Protection of Children’s Rights (SPARC), called on the government to raise taxes responsibly while safeguarding public health as well as their productivity.

“Increasing taxes on anti-health products will not only discourage the consumption of anti-cancer products, but also generate resources. The financial resources can then be allocated to the health sector for better health management. Thus, a tax on tobacco products will subsequently reduce the burden on health infrastructure and ultimately save more lives,” he suggested.

Tobacco industry sources attributed the drop in production and revenue to the alleged huge increase in cigarette smuggling and persuaded the government to cut the excise rate for low-priced cigarettes by 51%. from May 2017.

The WB report added that while the price of low-end cigarettes fell after the excise duty reduction, they were still significantly more expensive than illicit cigarettes. “However, legal production as well as sales are said to have seen tremendous growth, and in 2018 cigarette production returned to 2011-2015 levels.”

Additionally, the Social Policy and Development Center (SDPC) research titled “Quantifying the Potential Tax Base of the Cigarette Industry in Pakistan” analyzed that the profile of the industry in Pakistan provides interesting insights . The overall size of companies selected for analysis has more than quadrupled over the past decade, with net sales increasing from 17.6 billion rupees in 2004 to 70.4 billion rupees in 2018.

The SPDC study showed that among the three companies, the market share of one particular company increased from 56% to 75% during this period. The analysis also showed that the increase in net sales is greater than the increase in cost of sales.

Interestingly, over the last four years analyzed, tobacco companies reported declining sales while profit margins remained significantly higher compared to previous years. Thus, the decline in sales has not had much impact on profit margins in Pakistan.

Malik Imran Ahmed, Country Manager of Campaign for Tobacco Free Kids (CTFK) in Pakistan, said News Bowl tobacco is Pakistan’s “greatest silent killer”, with 438 people dying every day from its use.

He added that Pakistani children between the ages of 6 and 15 start smoking every day. “Children in Pakistan are the biggest victims as the tobacco industry targets them as replacement smokers. Smoking tobacco should be heavily taxed, making it difficult for [common people] to afford, and the government should also [clamp down] on the gray market through a track and trace mechanism,” he suggested.

Additionally, the head of CTFK highlighted the need to quantify the potential tax base of cigarette consumption in the country. “Companies are paying billions of rupees to celebrities to keep cigarette prices duty free. The propaganda is that there is an ‘illicit trade’ in cigarettes and this is causing more people to smoke more,” he claimed.

He revealed that revenue collected from consumers, which goes to the government, amounts to about Rs 125 billion per year. There are duty-free companies in the tobacco industry that claim to give their cut to the government, but that is not the case, he alleged. “They just collect money from consumers through pricing strategies. The cigarette tax problem is huge here. The World Health Organization has recommended a retail price which should include a tax of 75pc and the CTFK has recommended a tax of 100pc to 200pc so that the price of an average box of cigarettes is 500 rupees. Unfortunately, some manufacturers create obstacles in the taxation of cigarettes,” he said.

Representatives of a multinational cigarette and tobacco manufacturing company were unavailable to comment on cigarette excise tax and smoke-free legislation in Pakistan.

Studies have repeatedly shown that the industry benefits from a thriving customer base, with “replacement smokers” undermining efforts to deal with harmful activity. This information shows that the true social and economic costs of cigarette smoking in the country are very high, disproportionately affecting low-income smokers.

The health costs of tobacco consumption are more than five times the country’s tax revenue and although the industry is a major taxpayer in absolute terms, its contribution represents only a small fraction of the total costs that the public and subsequently the government have to bear it. . Most of these costs come from diseases such as cardiovascular and respiratory diseases as well as cancer. Many citizens know about these health problems long before they are diagnosed and only the privileged are willing and able to afford treatment.

As higher tobacco taxation is proven to discourage smoking in general, there needs to be more transparency on central and provincial tobacco policy to manage lethal indulgence so that both active and passive smokers can be protected .

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