Pakistan: ‘Sin tax’ on the anvil for cigarettes, sugary beverages

ISLAMABAD — After continued lobbying by civil society, Minister for National Health Services (NHS) Aamer Mehmood Kiani announced last Tuesday that soon a ‘sin tax’ will be imposed on cigarettes and sugary beverages.

Speaking at a public health conference at the Health Services Academy, Mr Kiani said that the PTI government was committed to increasing the health budget by five per cent of GDP.

“Various routes will be used to increase the health budget,” he maintained, “and one of them is imposing a sin tax on tobacco products and sugary beverages. That sum will be diverted to the health budget.”

Currently, the government spends a mere 0.6pc of GDP on health. It has been suggested several times in the past that sin taxes be imposed on products that cause health-related issues as a result of which the state pays heavy penalties in the shape of healthcare spending and lowered human productivity.

Talking to Dawn, the director general of the NHS Ministry, Dr Asad Hafeez, said that tax on tobacco and sugary beverages was being charged in some 45 countries.

“A sin tax is an internationally recognized term and is specifically levied on certain goods deemed harmful to society, for example tobacco, candies, soft drinks, fast foods, coffee and sugar,” he said.

“The United States charges about $1.5 (approximately Rs200) per pack of cigarettes, while the UK charges 40 pence (around Rs100) per liter of sugary beverages as sin tax. Thailand, as well as a number of other countries, has similar taxes that are earmarked for healthcare services.”

Replying to a question, Dr Hafeez explained that India imposes a sin tax on gutka and paan masala, and the sums thus collected are spent on the healthcare sector since these products cause illnesses that become a burden on the public exchequer.

“We have not yet decided on the exact amount for a sin tax [in Pakistan],” he clarified, “but it will certainly be a handsome sum. Because of the new tax, the price of cigarettes will increase, making it more difficult for young people to buy them. Some 1,500 youngsters start smoking in Pakistan every day, and we want to reduce that number.”

The general secretary of the Pakistan National Heart Association (PANAH), Sanaullah Ghumman, told Dawn that his association had for many years been demanding the imposition of a sin tax.

“Recently, during a meeting with President Dr Arif Alvi, we again raised the issue of such a tax,” he elaborated. “The minister for health was also present at the meeting, and the president assured us that he would do what was possible. The proposal was floated during the tenure of the former government as well, but was unfortunately not implemented. And even now, I fear for its fate since it is difficult to take such a decision in the face of an influential tobacco industry.”

To contextualize, according to a report of the NHS Ministry that was published a few years ago, tobacco is the single largest cause of preventable illness and death. In Pakistan, it causes some 108,800 fatalities every year, ie 298 per day. The report emphasises that the consumption of tobacco will continually increase the country’s healthcare expenses, in addition to imposing huge costs in terms of human resource.