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Pakistan to introduce ‘sin’ tax on cigarettes, sugary beverages

Sin tax is not a new concept and is charged in over 45 countries, including India. It is imposed to discourage consumers from using products known to harm public health and well-being.

Pakistan will soon introduce a ‘Gunnah Tax’ or Sin Tax on tobacco products and sugary drinks which would supplement its annual health budget, PTI reported. Announcing the news, Minister for National Health Services Aamer Mehmood Kiani said the newly formed Pakistan Tehreek-e-Insaf government was committed to increasing the health budget by five per cent of GDP, which now stands at a dismal 0.6 per cent.

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

Sin tax is not a new concept and is charged in over 45 countries, including India. Sin taxes are imposed to discourage consumers from using products known to harm public health and well-being. They are usually put in the top bracket of the tax collection regime, varying from place to place, to make the product so expensive for the user forcing him to relinquish the habit. The fund collected from these taxes goes into other welfare schemes.

In countries such as the UK, US, and Canada, sin taxes are levied on a series of products and services, including alcohol, tobacco, gambling, lotteries, sugary beverages and at some places on vehicles running on diesel. In India, sin tax is levied prominently on tobacco and alcohol.

Dr Asad Hafeez, the director general of the NHS Ministry, told Dawn, “The United States charges about $1.5 (approximately Rs 200) per pack of cigarettes, while the UK charges 40 pence (around Rs 100) per litre of sugary beverages as a Sin Tax. Thailand, as well as a number of other countries, has similar taxes that are earmarked for healthcare services.”

“We have not yet decided on the exact amount for a sin tax (in Pakistan),” he said, but hinted that “it will certainly be a handsome amount.”

“Some 1,500 youngsters start smoking in Pakistan every day, and we want to reduce that number,” he added.

In Pakistan, tobacco causes some 108,800 deaths every year, which is close to 298 per day. Various health organisations in Pakistan have been demanding the imposition of this tax from some time. Sanaullah Ghumman, the general secretary of one such organisation called Pakistan National Heart Association (PANAH), said 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 said. “The minister for health was also present at the meeting, and the president assured us that he would do what was possible,” PTI quoted him as saying.

How Pakistan reacted

The news received mixed reaction on social media, where some people hailed the proposal while some had reservations over it being termed as ‘Gunnah’. Leading the pack of dissenters was Federal Minister for Water Resources Faisal Vawda, who though welcomed the move, showed his reservations with it being called ‘Gunnah Tax’. “I’m a chain cigarette smoker myself and I appreciate all the measures taken by the government to discourage smoking and I understand it’s injurious to health but this term “Gunnah Tax” is inappropriate. If this is gunnah then what would we name and term the actual gunnahs,” Vawda wrote on Twitter.

Not only Vawda, but many others thought in the same vein.

But there was some positive word as well.

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