Islamabad   -  The government is likely to impose Rs10 health tax on cigarettes per packet and Rs1 on 250 ML bottle carbonated drink through finance bill 2019-20, it is learnt reliably here.

The government has also changed the name of the new tax on tobacco and carbonated drinks from Sin Tax to Health Tax, official sources told The Nation here Sunday.

According the source the federal cabinet in its meeting last month has approved Medium Term Macroeconomic Framework and health tax on cigarettes and carbonated drinks.

According the source the cabinet approved Rs10 health tax on tobacco per packet of 20 cigarettes and Rs1 on 250 ML bottle carbonated drink through finance bill 2019-20. 

The revenue generated through health tax will be earmarked for the health sector development over and above its routine budgetary allocation, said the source. The Finance bill will also include measures to check illegal manufacturing and illicit trade of cigarettes and other tobacco products, the source added.

It is pertinent to mention here that last year the Ministry of National Health Services, Regulation and Coordination (NHSRC) had moved a summary to the Economic Coordination Committee (ECC) for the imposition of Rs10 sin tax (now health Tax) on cigarettes per packet and Rs1 on bottle of sugary beverages.

“To discourage cigarettes smoking and use of sugary drinks (drinks with sugar including carbonated soft drinks, sport drinks and energy drinks), increasing revenues and saving money by reducing NCDs related health care costs, the ECC is requested to approve the imposition of sin tax on tobacco and sugary drinks proposed,” said a summary moved by the NHSRC.

According the summary the NHSRC had requested that the sin tax at the rate of Rs10 per pack of 20 cigarette sticks and Rs1 per bottle of 250ml (40 paisa per 100ml) on sugary drinks may be imposed for financing of Health Insurance Scheme, Fatal Disease programme, and other NCDs Control Programme.” The ECC will take up the summary in its upcoming meeting.

NHSRC in collaboration with participating provincial and regional health departments is working to implement its social health protection initiative of Prime Minister’s National Health Programme in all districts of Pakistan. Through this programme families living below poverty lines are being provided with free of cost health insurance to access indoor health care services in a dignified and respectable manner, said the summary.

Currently, the programme is providing services to 3.2 million families and 38 focused districts but is working to expand its horizon to 18 million poor families across Pakistan, the summary said. Through fatal disease programme, needy beneficiaries are selected and sent to different empanelled hospitals in the country for liver transplant, kidney transplant, bone marrow transplant, cochlear implant and cancer management.

The summary further said that Pakistan is obligated to achieve the targets set in Sustainable Development Goals (SDGs).Under target 3.4, Pakistan has to reduce one third premature mortality from Non-Communicable Diseases (NCDs) by 2030. NCDs, including heart disease, stroke, cancer, diabetes and chronic lung disease are collectively responsible for almost 68 percent of all deaths in Pakistan. NCDs are causing 51 percent of total burden of diseases, mostly in young age group. Simple cost effective measures could reduce the burden of NCDs, including incorporating exercise in the daily routine, having a balanced diet by decreasing junk food consumption, decreased intake of sugar and salt in everyday cooking and decreasing smoking and other tobacco use.

Tobacco use is the single largest preventable cause of death in the world. In Pakistan, tobacco is a cause of death of around 160189 persons annually. Almost 15.6 million adults currently consume tobacco in the country. Moreover, the economic cost of smoking amounts to Rs143.208billion. This includes direct costs related to healthcare expenditures and indirect costs related to lost productivity due to early mortality and morbidity.

Raising prices of cigarettes is one of the most effective tobacco control interventions because it is proven to reduce smoking especially among kids. In addition, besides reducing cigarettes smoking, high prices of cigarettes are most effective for increasing revenues. One of such interventions is application of sin tax on cigarettes that aims to reduce smoking and increase revenue.

Regarding sugary drinks the summary said that over consumption of sugar is a major contributor to obesity, diabetes and tooth decay according to the WHO guidelines. Sugar drinks are major source of sugar in diet and its consumption is increasing in most countries especially amongst children and adolescents. Apart from diabetes, obesity is a major risk factor in heart disease, cancers and other diseases. In new recommendations from the American Heart Association, children aged 2 to 18 should eat or drink less than six teaspoons of added sugar which is equivalent to about 100 calories or 25 grams.

National Diabetes Survey of Pakistan 2016-17 revealed that more than 26 percent of the country’s population, 27.4 million people over the age of 20, are suffering from type 2 diabetes and 14.47 percent are at risk of getting diabetes. Fiscal policies that target food and beverages to promote healthier alternative are practiced globally. One such approach is application of sin tax on sugary drinks that aims at reducing sugary beverages as well as sugar intake. The primary rationale is to discourage excessive use of sugar by the people to control burden and complication of NCDs specifically diabetes, said the summary.