ISLAMABAD: A meeting of the technical working group on tobacco taxation was held under the chairmanship of Dr Amir Sheikh, Joint Secretary (Admin), Ministry of NHSRC here Wednesday.
Badr-ud-din Ahmad Quraishi Chief (ST&FE-Policy) FBR , Muhammad ZaheerQureshi Secretary (ST&FE-Budget) FBR, Muhammad Waqas Tarar Director Tobacco Control Cell Mo NHSRC, Dr Fouad Aslam Technical Advisor The Union Pakistan Office, Dr. InamulHaq Senior Health Specialist World Bank, ShahzadAlam NPO World Health Organization, Dr Ziauddin Islam Technical Coordinator Tobacco Control Cell. Mr. Muhammad Javed Project Coordinator Tobacco Control Cell participated in the meeting.
Dr. Amir Sheikh emphasized on important assignment of working group to review the existing tobacco tax structure in Pakistan and to develop an action plan to increase taxes on tobacco products in line with FCTC recommendations.
Director Tobacco Control Cell gave detailed presentation on the subject. He said that Pakistan signed and ratified Framework Convention on Tobacco Control (FCTC) in 2004. According to Article 6 of FCTC Pakistan, had to implement tax and price policies which are the proven way to reduce tobacco consumption in the world.
He stated that by raising tobacco taxes, tobacco consumption and premature deaths would be reduced. It would also benefit tax collection through enhancement of tobacco taxation in Pakistan.
Director Tobacco Control Cell added that by raising tax we could prevent youth to initiating smoking. He quoted references from recent report published from Bloomberg Initiative to reduce tobacco use, “The Economics of Tobacco and Tobacco Taxation in Pakistan”.
Director Tobacco Control Cell stressed that this working group should recommend high uniform specific cigarette excise tax with annual adjustments to tobacco tax rates. He also stressed on the need to impose tax on other tobacco products. He also expressed the importance of earmarking tobacco taxes for health purposes and tobacco control.
Badr-ud-din Ahmad Quraishi, Chief of FBR gave comprehensive presentation on current tobacco tax structure in Pakistan. He thoroughly explained different acts and rules applicable to cigarette industries. He also explained FED structure and elucidated why there was two tiers system on tobacco taxation in Pakistan.
He said that single tier would cause disparity between prices of legal cigarette & illicit cigarettes thus encouraging illicit trade. He also explained the tax structure on imported cigarettes.
Muhammad ZaheerQureshi, Secretary, FBR told the participants that FBR will be launching Electronic Monitoring System in early months of next year for monitoring production of cigarettes. He said that by implementing two tiers system, there was maximum increase in tobacco tax revenues up to 12.5 billion in one year.
He said that FBR was dealing with issue of smuggling through maximum enforcement and raids. He proposed to include other relevant enforcement agencies in the working group. He also proposed to convene next meeting of the working group in early December, 2014.
Dr. InamulHaq, Senior Health Specialist, World Bank stressed that this working group should make clear TORs. He proposed to work on reforming tobacco taxation system, taking demand reduction measures and curbing smuggling of tobacco products.
Dr. Fouad Aslam appreciated the Mo NHSRC for notifying this working group and taking measures for reforming tobacco taxation system in Pakistan.
The meeting decided that next meeting of the working groupwill be held in first half of December 2014 and venue may be FBR. TORs of the working group will be drafted before next meeting. Planning Commission, Finance Division and other relevant enforcement agencies will be coopted in this group.
In order to send proposal to FBR prior to 2015-16 budget, the group shall finalize recommendations for enhancement of tobacco taxes and earmarking of tobacco tax revenues for tobacco control and health promotion by March 2015.
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