Sunday, August 14, 2022

FBR allowed imposing health tax on tobacco products, sugary drinks

The Ministry of law and Justice has allowed the Federal board of Revenue Service (FBR) to impose a health tax on tobacco products and sugary drinks through a bill or ordinance before the next budget.

In response to a letter from the FBR, the ministry of the law said the proposed federal health tax would fit the definition of tax laws.

There are 425 million diabetics, one in 11 in the world, while one in five in Pakistan. One in six pregnant women in Pakistan has diabetes. Pakistan is currently the fourth country with the highest number of diabetics.

Previously, the National Health Services (NHS) ministry also wrote a letter to the Ministry of Finance to impose the federal health tax to increase government revenue and discourage smoking.

The federal cabinet passed the health tax in 2019, but it has not yet been implemented. The rate proposes a tax of Rs10 per cigarette to discourage smoking among young people and help the government increase its income from tobacco products. Also, suggested at least 1 rupee tax on sugary drinks.

According to the Ministry of National Health Services, 166,000 deaths each year in Pakistan due to smoking and, according to one study, tobacco-related illnesses were causing an annual loss of Rs 615 billion to the national public purse.

Malik Imran Head of the Campaign for Tobacco-Free Children said the FBR should implement the health tax to discourage smoking and reduce the overall cost of health in the country before the next budget.

Mr. Imran said that the implementation of the health tax and the increase in tobacco taxes should be treated as two separate things by the FBR and the government.

The health tax should be applied before the budget is approved, while cigarette taxes should be raised separately in the budget to make tobacco products more expensive and out of reach for children and young people, he suggested.

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