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SDPI

Press Release

Published Date: Jul 17, 2020

NADRA to hold up FBR for implementation of track and trace system on cigarette packs

Pakistan annually faces 59.3 Billion rupees revenue loss due to illicit trade and Rs 17.3 Billion loss due to tobacco tax evasion. Experts from the diverse sectors unanimously believe that tobacco taxation can help the government in revenue generation and controlling health burden by taking some right measures. They were sharing their views with the participants at webinar on ‘Tobacco Industry Infodemic, and the need for Higher Tobacco Taxation’ organized by the Sustainable Development Policy Institute (SDPI) here on Saturday.

Dy Director Projects, NADRA Syed Alam Raza, while highlighting the role of NADRA in digitizing Pakistan through different initiatives at national and international levels, emphasized on Digital tax stamp solution of various illegal practices in the tobacco industry. He said that the illicit trade, tax evasion and counterfeit, refill issues as the basic cause of revenue loss and health issues. As a result, he said, Pakistan faces 59.3 Billion rupees revenue loss annually just as by illicit trade.

Moreover, he added, Pakistan faces Rs 17.3 Billion loss annually due to tobacco tax evasion and Rs 2 Billion loss by counterfeit phenomenon. NADRA has presented a solution to FBR for introduction of digital tax stamps solution where the consumer can also check if the cigarette pack is tax paid and this solution remained a huge success in several countries, he concluded.

Dr Abid Qaiyum Suleri, Executive Director SDPI, while covering various other dimensions of the issue, said that taxation is another neglected sector in terms of cigarettes and tobacco usage. Lobbies having vested interest have posed hindrances in taxing tobacco and other allied products, he added.

“In case of cigarettes, manufactures and marketing companies lobby against taxation whereas tobacco growers have strong presence at legislative forums who oppose any move on the right direction,” Dr Suleri observed and added further that. COVID19 patients who are smokers and have comorbidities including upper respiratory diseases, other diseases related to lungs etc. are at high risk which is quite opposite to popular perceptions that may be termed infodemic.

Dr Fouad Aslam, Advisor of the Union against tuberculosis and lungs disease on the occasion said that tobacco manufactures in Pakistan are very strong and besides, tax system is extremely complicated. He opined that tobacco taxation is the most important factor in reducing tobacco use, prevalence and consumption which is being ignored because of under reporting and maximum illicit trade in Pakistan. Hence, the market is flooded with illicit cigarettes which are available well below the official price.

Mr Khurram Hashmi, Focal Person the Union in Pakistan said that one of the most important and neglected issue is pictorial warning on tobacco products. This compliance must be ensured from currently 60% graphic to at least 85%. Hence, a coherent strategy is required to bridge policy gaps and to address procedural hindrances, he concluded.

Mr Tariq Hussain Sheikh, from FBR on the occasion informed the participants that FBR is trying to ensure tobacco taxation to reduce tobacco consumption. He added further that FBR believes that there are many other allied problems like illicit trade, smuggling, under-reporting, counterfeit products etc. causing huge revenue loss and thus, all of these issues can be tackled through enforcement measures like track and trace system, an electronically monitoring.

Dr Vaqar Ahmed, Joint Executive director SDPI, emphasized the need to study how progressive fiscal policy can address the adverse impacts of tobacco production and trade. There is a case for much higher federal excise duty on the production of tobacco products and any imports by this sector. Moreover, a stronger coalition which includes parliamentarians, media, think tanks, and civil society organizations can empower citizens and help them understand the negative implications of expansion of the tobacco sector. Mr Waseem Iftikhar Janjua, SDPI explained the phenomenon of Infodemic as a mix of pandemic and excessive information that adding unsubstantiated knowledge can be very dangerous and can cost lives in case of tobacco.