ISLAMABAD: The government should take strict measures to curtail the influence of tobacco lobby in legislative affairs and avoid giving tax benefits to multinational companies.
This was suggested in a research study titled ‘Regional Tobacco Tax Regime and Its Implications for Health’ conducted and released by Sustainable Development Policy Institute (SDPI) – a think-tank based in Islamabad.
As per the study, laws against tobacco products should be implemented in letter and spirit without any discrimination. In addition, statistically false claims of tobacco companies regarding the illicit trade of cigarettes should be rejected, and no favours should be offered to them in taxation, it added.
The SDPI stated that the ruling elite should also keep distance from the tobacco industry, as the industry uses it as a vehicle of their influence and interest. “It makes the tobacco lobby becomes powerful enough to demand tax relaxations in the name of illicit trade.”
As per the report, “While the consumption figures stand at a whopping 86.6 billion cigarettes per year, official figures by the industry remain restricted to 55 billion only. The rest is usually blamed on illicit trade; but the volume of illegal trade is not more than 9pc, which is way less than the tall figure of 41pc being reported by companies.”
Therefore, the average price of a cigarette pack in Pakistan remains low in the region, thereby affecting not only the revenue generated by the tobacco industry but also causing severe health repercussions, the report maintained.
The study suggested that a uniform tax system needs to be enforced at all levels so as to control tax evasion, urging the government to abolish the tier system which was providing tax evasion opportunities to tobacco companies.
“The single tiered system would not only help strengthen the revenue generation mechanism, but would also effectively address the problem of illicit trade,” it concluded.
