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Experts Stress Need for Evidence-based Tax Policy for Tobacco Trade in Pakistan

The taxation policies toward the tobacco industry in Pakistan need to be based on real evidence, covering facts and figures about the share of illicit and smuggled products in the Pakistani market.

This was the crux of a discussion by trade experts during a webinar titled, ‘Illicit, Illegal or Smuggled Tobacco Products in Pakistan – Deconstructing Tobacco Industry’s Narratives’, organized by the Sustainable Development Policy Institute (SDPI) on Friday.

On the occasion, Additional Collector Pakistan Customs, FBR, Dr. Karam Elahi, highlighted the issues concerning the tobacco industry. He asserted that one of the major problems facing the country’s economy was the lack of written documentation and the same applied to the tobacco industry. He suggested that there should be tobacco control in the country. He said that political consensus should be developed to come up with the right tax policies to respond to challenges in the industry.

Country Lead, The Union, Mr. Khurram Hashmi was of the opinion that it was high time to revisit the existing debate around the industry, keeping in view the well-being of the people. Besides, he said, coordination among stakeholders should be improved to build a joint narrative about the tobacco industry and taxation issues.

While presenting facts and figures about illicit tobacco trade in Pakistan, Executive Director, The Initiative, Dr. Amina Khan asserted that regular and timely information on tobacco users of Pakistan could help make key policy decisions pertaining to the industry and the taxation issues. She said there were several measures that could be taken to stop and discourage tax evasion in the industry. She stressed the need for a track and trace system and upstream omg the enforcement, using the IOCO [Input Output Co-efficient Organization] ratio to respond to various loopholes.

Earlier, Mr. Waseem Janjua, a senior researcher at SDPI, highlighted that there were various narratives about the illicit trade and share in taxation by tobacco companies, but most of such narratives were not based on truth. He concluded that one in every six packs consumed in Pakistan could be illicit, whereas tobacco companies tended to misguide the government about the facts to influence taxation policies.

Senior analyst, Mr. Waseem Saleem, was of the view that “we have a complex market of tobacco.” He suggested that all the factors pertaining to illicit trade and smuggling and their impacts on the industry should be thoroughly analyzed for the right policy measures.

Earlier, Syed Ali Wasif Naqvi, Senior Research Associate SDPI, presented an overview of the tobacco industry and taxation policy in Pakistan.

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ProPK Staff