Law ministry

Department of Justice authorizes RBF to impose health tax on tobacco products

PESHAWAR: The Ministry of Law and Justice authorized the Federal Council of Revenue [FBR] to impose the health tax on tobacco products by an ordinary bill or by an ordinance before the next budget.

In response to a letter from the RBF, the Justice Department said the proposed federal health tax would fall under the definition of tax laws for the purposes of the law.

“Given the restriction on the use of funds raised under the proposed law, this will not constitute a money bill,” the Justice Department said in a letter to the RBF.

The imposition of the federal health tax on the manufacture and sale of harmful products is the domain of parliament by virtue of the constitution. Therefore, the imposition of the said tax on this sale and manufacture would be applicable throughout Pakistan, the Justice Department said.

The federal cabinet approved the federal health tax on tobacco products in 2019, but it has yet to be implemented. The tax proposes a tax of Rs10 per cigarette to discourage smoking among young people and help the government increase its revenues through tobacco products.

Smoking causes an estimated 166,000 deaths in Pakistan each year, while tobacco-related illnesses result in an annual loss of Rs 615 billion to the public purse.

Anti-smoking activists hailed the Justice Department’s decision and urged the RBF to implement the tax nationwide before the next budget.

The leader of the national campaign for tobacco-free children, Malik Imran, said the RBF should implement the health tax to discourage smoking and reduce the overall cost of health care in the country before the next budget.

He said the RBF should not wait for the budget and start collecting the additional revenue through the health tax by applying it immediately.

Imran said the implementation of the health tax and the increase in tobacco taxes should be treated as two separate things by the RBF and the government.

The health tax should be applied before the budget is passed while the cigarette taxes should be increased separately in the budget to make tobacco products expensive and out of the reach of children and young people, he said. -He suggests.

Previously, the Department of National Health Services and Regulation had also written a letter to the Department of Finance for the imposition of the federal health tax in the country in order to increase government revenue and discourage smoking.