PM aide unhappy with health tax delay

ECC puts off decision on proposal of imposing tax on tobacco, beverages

ISLAMABAD:

The adviser to prime minister on health has expressed his disappointment over the inordinate delay in approving the levy of health hazard tax on tobacco and beverages as the matter has been pending for a long time.

A proposal to slap health hazard tax was sent to the Economic Coordination Committee (ECC) of the cabinet at the time of presentation of budget. However, the ECC did not endorse it.

Later, the Ministry of National Health Services Regulations and Coordination again asked the economic decision-making body to approve the proposal, but the matter was put off.

Sources told The Express Tribune that the special assistant to prime minister on health, in a recent cabinet meeting, raised the issue of health hazard tax on tobacco and sugar-sweetened beverages.

He lamented that an important initiative had been delayed inordinately and now once again the decision was deferred.

He appealed to the authorities that ECC’s decision should be reconsidered given the health problems being caused by the two products.

Adviser to Prime Minister on Finance and Revenue Shaukat Tarin argued that it was not the most opportune time for introducing new taxes as it would be tantamount to announcing another mini-budget.

He assured meeting participants that additional taxes on tobacco and sugary beverages would be considered at the time of presentation of next budget.

It was pointed out that while the scientific evidence of harmful effects of tobacco was overwhelming, the link between sugary drinks and diabetes had not yet been well-established scientifically.

It was suggested that a committee should be constituted to finalise recommendations before the budget.

The cabinet considered the ECC’s decision on the allocation of health contribution from the revenue generated on account of health hazard tax on tobacco and sugar-sweetened beverages to the Ministry of National Health Services Regulations and Coordination.

It decided to constitute a committee to firm up recommendations on the issue well before the next budget. The finance adviser would be convenor of the committee while special assistants to the prime minister on health and poverty alleviation would be its members.

Earlier, the National Accountability Bureau (NAB) took notice and initiated a probe into alleged tax evasion by the cigarette manufacturing industry.

According to the Auditor General of Pakistan (AGP), the cigarette industry has evaded Rs33 billion in taxes.

The cigarette manufacturing industry has a powerful lobby, therefore, the country suffered a revenue loss of Rs60 billion following the introduction of third slab of federal excise duty during the tenure of previous Pakistan Muslim League-Nawaz (PML-N) government.

 

Published in The Express Tribune, November 24^th, 2021.

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