The government has decided to impose health tax on cigarettes and cold drinks. It will be a part of the budget for next year, 2019-2020.
Tax worth Rs10 will be imposed on a pack of cigarettes worth Rs20, said Babar Atta, who is the adviser for tobacco control. He remarked that tax will be imposed on carbonated drinks too. The government will charge Rs1 on 250ml bottles. The government hopes to earn Rs50 billion tax.
The tax is being implemented to discourage people from smoking, remarked Atta.
The money will be used to provide free medical treatment to people using Sehat cars, he explained. Sehat Insaf Card allows one household to get medical treatment up to Rs720,000 from a private or a government hospital.
Previously, the government had divided tobacco taxes into three tiers. The third tier was taxed the least and resulted in the production of more cigarettes. Atta claimed the government was able to collect more revenue through this.
The government has now imposed heavier taxes on cigarettes and the revenue collected from this will be used to provide healthcare services, according to Dr Zafarullah Mirza, the state minister for national health service, regulations, and coordination.
According to a 2013 study by the University of Illinois at Chicago Institute for Health Research and Policy, over 22 million (19%) Pakistani adults over 18 years use some form of tobacco. The experts said: “Cigarette prices in Pakistan are among the lowest in the world.” Cigarette excise taxes in Pakistan account for just over half of the price paid by users. “This is below the level in countries that have taken a comprehensive approach to reduce tobacco use, where excise taxes account for 70% or more of the retail price,” their report said.