Academicians appreciate finance minister going ahead with tobacco tax reforms
Business
Scholars urge reforms implementation in letter and spirit
- They stress that cigarette is a non-essential item and should be taxed
- Reports say industry caused Rs567 billion loss to national exchequer in a decade
ISLAMABAD (Web Desk) - As the economy is in lamentable situation, Finance Minister Muhammad Aurangzeb’s hopeful message that the country could secure $3 billion package from the International Monitory Fund (IMF) seems encouraging.
However, scholars have stressed the need to implement the IMF reforms in letter and spirit for any meaningful effect.
For instance, Dr Aftab Madni - dean of the Indus University - underlined the need to implement the recommendations of the IMF regarding tax reforms in a true spirit.
“Pick and choose will not help the reform process” he cautioned.
“The IMF has explicitly recommended that there has to be uniformed tax on cigarettes regardless of their national or multinational brand. This alone will generate revenue in billions,” he stressed.
“Cigarette is a non-esstential item and the government will not face any public backlash if it moves ahead as per IMF recommendations,” he advised.
He said that about nine percent of Pakistanis are smokers and the volume of second-hand smoking still has to be explored. The cigarettes need to be made expensive in any case because they causes disease and deaths that have to be accounted for.
He appreciated Dr Hassan Shehzad from International Islamic University, Islamabad - who is a renowned researcher on smoking and its effects - for being the only researcher whose report has been referred to by the IMF in its recommendations for tax reforms.
Dr Shehzad quoted the minister as saying, "The country’s current $3 billion arrangement with the fund runs out in late April and the government is seeking a long-term and bigger loan to help bring permanence to macroeconomic stability as well as an umbrella under which the country can execute much-needed structural reforms."
He added that reports have mentioned that cigarette industry is responsible for a loss of Rs567 billion to the national exchequer in less than a decade.
He said the finance minister had a profound background in banking and it's normal for a banker to understand the volume of losses a product injurious to human health can cause.
“Imposing uniformed tax on tobacco products is too little and too late, but it has to be done,” Dr Shehzad remarked.
