The federal government has decided to impose a ‘health tax’ on cigarettes and carbonated drinks in the upcoming budget for the fiscal year 2019-20.
This was confirmed by Prime Minister’s Focal Person for Tobacco Control Babar Bin Atta on Sunday.
As part of the proposed move, the federal government has decided to impose a tax of Rs10 on a pack of 20 cigarettes.
The government has also decided to impose a tax of Re1 on a 250-millilitre bottle of carbonated drinks, the prime minister’s aide said.
The health tax, erstwhile known as the ‘Sin tax’, is expected to be announced in the federal budget for the fiscal year 2019-20, which is due to be unveiled on Monday, June 10.
The revenues generated from the tax are expected to be spent on the health care sector, primarily providing health insurance through the government’s flagship health card, Atta said. He added that the tax is expected to generate around Rs40 to Rs50 billion in additional revenues for the government.
The aide added that this will be the first time in the history of the country that a tax is being imposed to discourage the use of tobacco.
The government has taken a courageous decision and it cannot be blackmailed by the ‘merchants of death’, the aide further added.
Earlier, the cabinet after discussing the health hazards posed by smoking had decided in-principle to impose the tax on cigarettes and to use the revenues to shore up the health sector.
Special Assistant to Prime Minister for National Health Services Dr Zafar Mirza had in an earlier statement said that the hike in cigarette prices was imperative to prevent children from taking up smoking. Moreover, the aim of the tax is to reduce the overall consumption of tobacco and carbonated drinks for a healthier society.
Mirza said that excessive use of sugary drinks was increasing risks of diseases
Over 15 million people in Pakistan use tobacco and around 160,000 people in the country are estimated to die because of smoking-related causes. Reports have revealed that around Rs143.208 billion are spent every year on treatment of tobacco-caused diseases.
Tobacco use is a major cause of non-communicable diseases which include 15 types of cancers, health reports say.
Currently, the government has been regulating the price of cigarettes by imposing a greater tax on cigarettes apart from increasing the size of the graphic warning on cigarette packs to discourage the use of the tobacco product.
Moreover, the beverage industry faces a ‘capacity tax’ for aerated water spread over three categories.
However, this is not the first time that the government has suggested raising taxes or federal excise duties (FED) on either cigarettes or sugary drinks — or just sugar.
The previous government consistently increased taxes and FED on cigarettes and sugary drinks.
Published in The Express Tribune, June 10th, 2019.