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Reduction in tobacco taxes to be a disaster: PIMA

Doctors resent government’s plan to make smoking ‘easier’

Reacting to a statement made by the Special Assistant to the PM on Revenue, who has expressed that high taxes on cigarettes encourage smuggling which, in turn, costs billions to the exchequer, the president of Pakistan Islamic Medical Association (PIMS) Wednesday suggested that if such a cause and effect relationship is logical, then the government should bring heroin, hashish and other menaces in the open market as a commercial commodity as well, and earn huge income through taxes.

“The government should be ashamed for increasing the prices of basic commodities like bread, fruits, milk, petrol, electricity, etc. and reducing the prices of dangerous items like tobacco,” the PIMA chief stated. He pointed out that Pakistan has one of the largest populations of tobacco users in the world, with over 22 million adults smoking cigarettes, ‘huqqa’ or ‘biri’ and millions more using smokeless tobacco products, including ‘gutka,’ ‘naswar,’ and ‘paan.’ Over 100,000 deaths are attributed to tobacco use each year from lung and oral cancers, strokes, heart and respiratory diseases.

Research has shown that increase in tobacco prices leads to a decrease in the number of smokers in a given community, one of the most effective of many strategies to curb tobacco use. “Here, our government is going to do exactly the opposite: make it easier to buy cigarette. While it may not matter for the richer strata of the society, even a small price increase matters a lot for the poor and lower middle class. It is this group unfortunately that is farthest away from any sort of health education, health care and economic benefits when it comes to illness that inevitably stems from tobacco use,” the PIMA president pointed out.

A research study on tobacco taxation in Pakistan, conducted jointly by FBR, World Bank, University of Toronto, Johns Hopkins University, University of Illinois at Chicago, and Beaconhouse National University, concluded that a uniform specific excise tax of Rs31.2 per pack of 20 cigarettes, could reduce overall cigarette consumption by 7.5 per cent, increase tax revenues by Rs27.2 billion, leading to over half a million users quitting and reducing premature deaths among current adult smokers by over 180,000, while also preventing 725,000 youth from taking up smoking.

Only a week ago, the Minister of State for Health Saira Afzal had recommended an increase in the Federal Excise Duty on lower slab of all brands of cigarettes from the current Rs32.98 to Rs44 per pack of 20 cigarettes.

Civil society report unveils tactics of tobacco industry

Shops place cigarettes with candies and snacks, 14pc give free gifts on purchase of cigarettes, 89pc shops do not display ‘No sale to Minors’ signage

Islamabad: Fifty percent of the 500 shops surveyed in six major cities of Pakistan including Islamabad and Rawalpindi place cigarettes for sale together with candies and snacks, 14% give ‘limited time offers’ or free gifts on purchase of cigarettes, and 89% shops do not display ‘No sale to Minors’ signage.

This is how multinational cigarette manufacturing companies are systematically targeting enticing children as young as six years old to tobacco addiction as current customers die or quit smoking, reveals a national survey conducted by TheNetwork for Consumer Protection.

The findings of the survey, which is the first of its kind conducted in Pakistan to expose the marketing techniques of tobacco companies, were released at the launching of a report on ‘Monitoring of Tobacco Advertising, Promotion, Sponsorships (TAPS) and Point of Sales (POS) Advertising’ here at a local hotel. Tobacco manufacturers are exposed as employing aggressive marketing techniques including placement of cigarette advertisements on shops selling candies and chocolates, and directly outside the gates of primary and secondary schools throughout Pakistan. The survey was conducted in schools around six major cities namely, Islamabad, Rawalpindi, Peshawar, Lahore, Karachi, and Quetta, where 500 Point of Sales (shops) of cigarettes were monitored.

The event offered a platform that called for adoption of a five-point ‘Charter of Action’ to safeguard Pakistan’s vulnerable school children from the malicious motives of the cigarette manufacturing companies. The charter calls upon the federal government to amend the Prohibition of Smoking and Protection of Non-Smokers Health Act 2002 to comprehensively ban TAPS as per Article 13 of the World Health Organisation Framework Convention on Tobacco Control (FCTC), which the government ratified in 2005. Secondly, it calls for the development of a strict official mechanism to ensure enforcement of the 2002 law for completely banning sale of cigarettes around schools and holding the multinationals accountable for its gross violations. Thirdly, it urges the government to ensure that shopkeepers selling cigarettes to minors are mandatorily booked and strictly penalized under the law. Fourthly, it calls upon local authorities to ensure that cigarettes are sold in packs of 20 and must not in lose or single sticks.

Finally, the charter calls for enforcement of Tobacco Vendors Act 1958 (that was legislated as part of the West Pakistan and was later adopted by provincial setups) by making licenses mandatory for retail sale of manufactured tobacco.

Supporting the initiative, Senator Nasreen Jalil called for a ban on tobacco advertisements in view of its serious implications on youth. “There should be a strict enforcement of existing tobacco laws to regulate the industry. It is unfortunate that laws are present but are not being enforced. It is an uphill task to control tobacco use and take action against multinational cigarette manufacturers, but we have to do it at every cost,” she said. Nasreen requested the courts to ensure enforcement of tobacco-related laws, and assured that the parliamentarians are ready for necessary legislation to control tobacco use and advertising.

I R Rehman of the Human Rights Commission of Pakistan suggested that a national movement against acts of tobacco manufacturers should be launched with the participation of teachers, social workers, and other stakeholders.

The CEO of TheNetwork, Nadeem Iqbal, rejected the industry’s claim that it sells cigarettes to persons above 18 years of age only. Referred to a previous survey, he said, not a single shopkeeper produced the relevant license required for selling cigarettes at shops. “We have already filed a petition in the IHC for implementation of 85 per cent graphic health warnings on cigarette packs which is not being implemented by manufacturers,” he added. Nadeem also regretted non-compliance of prohibition of smoking in the premises of the Supreme Court and Parliament.

Earlier, Dr. Maria from The Network termed the egregious marketing tactics of multinational cigarette manufacturing companies as a clear violation of the law.

The ceremony also featured small children sharing their personal experiences about sale of tobacco products along side sweets and candies, etc. Bakar Raza claimed being attracted to cigarettes at a shop, which had prominently displayed tobacco products. Five year-old Alina Iqbal said many children are attracted to cigarettes in shops where red and blue boxes of cigarettes are placed with chocolate packs. Muhammad Rabi and Iman Javed objected why shopkeepers are displaying cigarette packs along side chocolates and candies. Laiba Akhtar recollected how a shopkeeper handed over a cigarette pack to her when she demanded one, without inquiring about her age or asking any other question. Mahir Ali and Ayyan displayed banners and chanted slogans against the tactics of multinational tobacco manufacturers. Mian Osama questioned why the government wants to generate revenue at the cost of the health of young people. Nayyab Shakir also shared his experience about sale of tobacco products to youngsters by shopkeepers.

The event was attended by senior officials of the Competition Commission of Pakistan, parliamentarians, and representatives of NGOs and civil society, all of who endorsed the need to stop multinational cigarette manufacturing giants from deceptive marketing practices and selling techniques which attract small children towards tobacco products at retail shops near schools.

Over 20% smokers consume smuggled cigarettes

Over 20% of smokers puff tax-evaded smuggled cigarettes in Pakistan as heavy taxes on locally manufactured products continue to hit the industry hard.

“These LTE (local tax-evaded) cigarettes are extremely cheap,” said the State Bank of Pakistan (SBP) in the Annual Report on the State of Economy in fiscal year 2015-16.

“Average selling price of LTE brands in Pakistan is Rs27 per pack, which is far below the minimum tax per pack of Rs33.8,” said the central bank quoting Nielsen’s report on “The challenge of illicit trade in cigarettes: impact and solutions for Pakistan-2015”.

“In 2014, 17.3 billion local tax-evaded cigarettes were sold in the country, which was 21.1% of the total cigarette market in Pakistan,” it said.

The central bank added the price of locally manufactured cigarettes had increased over the years mainly due to imposition of excise taxes. This has created a huge price gap against illicit (non-duty paid, smuggled and counterfeit) cigarettes.

The number of illicit cigarette smokers is gradually expanding with the passage of time. “Nearly one billion cigarettes are added every year to the black market,” it added.

No US-FDA certified medicine plant

Separately, the State Bank highlighted that Pakistan had not a single medicine manufacturing plant, which was working in compliance with the standards prescribed by the US Food and Drug Administration (FDA).

Pakistan does not have FDA-approved plants despite the size of the industry standing at $2 billion with a population of 200 million people.

On the contrary, Jordan and Bangladesh with an industry size of $1.5 billion each and population of 17 million and 170 million, respectively, have three and five FDA-certified plants.

“FDA approved plants allow firms to make inroads into markets of advanced economies,” the central bank said.

Pakistan’s pharmaceutical industry used to be the most modern in this region during the 1960s. However, it could not keep pace with the developments taking place in other countries.

The industry is facing “some underlying issues, such as strict regulation, unpredictable price structure, lack of patent protection, abundant supply of counterfeits and lack of US FDA approved plants,” it said.

Accordingly, the growth in the pharmaceutical industry slowed down to 6.5% in the fiscal year ended June 30, 2016 from 7.5% in the preceding year, according to the bank.

Steel production slumps

The overall steel production witnessed a contraction of 9.3% in FY16, compared to a growth of 35.4% in the previous year.

“The suspension of PSM’s (Pakistan Steel Mills) operations overshadowed the notable performance of private steel manufacturers,” the SBP said.

The steel industry mainly faced two key challenges during the year which constrained domestic private manufacturers from effectively utilising their capacity expansions.

First, the deepening liquidity crisis in PSM caused its operations to come to a complete standstill from July 2015.

Second, the unprecedented decline in international steel prices, coupled with the influx of cheap Chinese steel under the free trade agreement, squeezed the profit margins of domestic firms.

Published in The Express Tribune, November 19th, 2016.

Taxing tobacco

Consider the fact that every fourth cigarette sold in Pakistan is sold illicitly. It comes as no surprise then that the Federal Board of Revenue (FBR) recently ran an ad in all major daily papers asking people to ‘Say no to smuggled/non-duty paid cigarettes’. What was surprising about the advertisement, however, was that it did not feature any of the popularly smuggled brands responsible for illicit sales.

Brands that are popular both in Pakistan and abroad (Marlboro, Dunhill, Benson & Hedges) were nowhere on the ad. The ad conveniently skipped brands like Marlboro, Dunhill and Benson & Hedges, which are also produced locally. On the outset, FBR’s brand choice in the ad might not make sense.

Many of the brands actually featured are so obscure that their trade is negligible. How many people do we know who smoke Pine Slims or More on a regular basis? Have most people even heard of the brand called Pleasure?

But the ad makes sense when we think about how the tobacco industry operates. It follows a simple mechanism: addiction. For local producers of international brands, an ad like this works in their favour.

A smoker who is addicted to an international brand is ready to buy its local version when the smuggled one is not available. In this way, international brands that are smuggled end up creating markets for local versions, while the parent company makes money either way.

Losing billions While Big Tobacco remains a potent a force all over the world, it is particularly powerful in Pakistan where it dominates 81 per cent of the market. At the same time, tobacco is one of our most heavily taxed industries. Last year alone, almost Rs 130 billion were collected from the tobacco giants. An amount that high should make us reflect on the scope of influence these companies potentially wield.

Keep in mind the scale of the tobacco industry- the annual tax imposed on the industry can increase by 25 per cent if illicit sales are curtailed. For now, our national exchequer is losing at least Rs 30 billion annually because of the illicit cigarette business. The government, meanwhile, is trying to broaden its tax base from several avenues; moves like the recent announcement of a banking tax, and the campaign asking consumers to report on restaurants all clearly indicate the government’s
attempt to increase its tax collection.

This is not surprising – the International Monetary fund (IMF) recently asked ( the Pakistani government to impose additional taxes of Rs 160 billion to decrease its budget deficit for the coming year. The government is clearly stepping up its game, but in a country with a theoretically progressive but practically regressive tax system, we really need to see where this show is going.

If the FBR is serious about fixing the loss to the national exchequer, and if Pakistan is to actually tackle the problem of smuggled cigarettes, our government will have to take a firm and principled stand. It needs to introduce a policy against cigarette smuggling, one that is grounded in addressing the root of the problem, and is not partial to certain players. It needs to tackle the problem of smuggled cigarettes across the board. It cannot be manipulated by or cower to certain companies.

But the fact remains that Big Tobacco companies do not want to harm their markets (for smuggled brands), or lose their customers. So while they willingly condemn cigarette smuggling, they overlook brands their own companies produce locally. This is exactly what the FBR did. As long as there is obvious pandering to chosen brands, advertisements like theirs cannot be taken seriously by anyone involved in the trade. Meanwhile, the people of Pakistan will continue losing more and more tax money, and while cigarette smuggling effects the entire tobacco industry as a whole, it’s the homegrown brands and companies that really end up suffering.

NHS minister receives top WHO award for tobacco control

ISLAMABAD: National Health Services (NHS) Minister Saira Afzal Tarar was conferred the top World Health Organisation (WHO) award in recognition of her leadership to Tobacco Control initiative. WHO Regional Head Dr Ala Alwan handed over the award, conferred by WHO Global Chief Dr Margaret Chan, to the minister. Dr Ala Alwan and Centres for Disease Control (CDC) USA Director Dr Tom Frieden, currently on a visit to Pakistan, met the minister along with their delegation on Thursday. While handling over the prestigious award to the minister, Dr Alwan said WHO recognises the leadership of the Pakistan’s Health Minister Saira Afzal in taking forward tobacco control by announcing enhancement of size of pictorial health warnings on cigarette packs to 85%. The initiative makes Pakistan only the second country in the world to introduce such a measure for public awareness and to dissuade smokers and non-smokers from use of tobacco, which is a major cause of preventable deaths in the country. Later, a delegation level meeting was held between the minister and the two visiting dignitaries.

Prime Minister’s Focal Person for Polio Eradication Ayesha Raza Farooq, senior officials of Health Ministry and international partner agencies attended the meeting. Saira Afzal, on the occasion, shared with the delegation that the Polio Eradication Initiative enjoys the highest level of government commitment and ownership at all levels driven by a strong political will and national consensus to root out the disease. “The government is working to ensure availability of high quality maternal, newborn and child health services to all, especially the poor and a ten point national vision for coordinated priority actions to address challenges of reproductive, maternal, newborn, child health and nutrition has been commissioned on the orders of the Prime Minister” she added. She informed the delegation that the ministry is addressing the issue of increasing burden of non-communicable diseases (NCDs) with appropriate strategies. “An NCDs unit is fully functional in the ministry and we are heading towards finalisation of a National Action Plan for NCDs with continued support of the WHO,” she added. The minister said tobacco kills about 108,000 Pakistanis annually while 1,200 Pakistani children between the age of 6 and 15 begin smoking everyday, which is an alarming situation. “The ministry is taking every possible step to reduce the prevalence of tobacco use by implementing the framework conventions on tobacco control to which the country is signatory,” she informed the delegation.

She praised the WHO’s Eastern Mediterranean Region (EMR) initiative of assessment of “Essential Public Health Functions” in the region and requested WHO to provide technical assistance in conducting an assessment of essential public health functions in the country. Acknowledging the visit of CDC Director Dr Tom Frieden, the minister said that we have a strong partnership with CDC in the area of disease control and this visit would provide new impetus to our existing collaboration.

The minister requested the CDC to support in establishing a world-class disease prevention and control centre at the National Institute of Health Islamabad, modelled on centres for disease control with laboratory and disease surveillance network down to the district level. Speaking on the occasion, Ayesha Raza Farooq said Pakistan has come a long way since the explosive outbreak of 2014 and much has been done to change the complexion of the polio eradication drive in the country. “We have been encouraged by the recognition of the turn-around in Pakistan by the International Monitoring Board (IMB) and recently concluded Technical Advisory Group meeting. The guidance of Polio Oversight Board chairman would be of critical importance as we move forward,” she said. Ayesha emphasised the importance of utilising the current opportunity to synergise the efforts of Polio Eradication Initiative to Routine Immunisation. “We have decided to use the Polio Emergency infrastructure to monitor routine coverage,” she added.

Dr Ala Alwan reiterated his commitment to working closely with Pakistan in the areas of Public Health. He said the upcoming assessment of public health functions supported by WHO was a critical initiative. CDC Director Dr Tom Frieden expressed the support of his organisation towards strengthening disease control in the country. He said his organisation was willing to work closely and strengthen partnership with Pakistan to improve health indicators through a strengthened disease surveillance and response system.

Petitioning UK government about tobacco industry lobbying in Pakistan

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Lured by revenues’ argument, Dar forms committee

ISLAMABAD: As the industry’s outcry gains momentum, the government has constituted a committee to review the Pakistan Tobacco Company’s demand to withdraw the latest health regulation, which requires manufacturers to enhance the size of the pictorial warning on cigarette packs.

The pictorial warning, which explicitly shows potential smoking hazards and carries an image of a mouth cancer victim, is required to be enhanced from 40% to 85% under the new regulations that kick in from March 31. These guidelines were announced by the Ministry of National Health Services and Regulation early last month

However, the decision has drawn flak from the tobacco industry, including retailers and growers. On Friday, the industry’s single largest player further mounted pressure just weeks before the new health regulations will come into force. It managed to get a committee constituted during a meeting with Finance Minister Ishaq Dar.

The measure will make Pakistan only the third country in the world besides Thailand and India to have enhanced pictorial health warning to 85%. Under the new regulation, cigarette manufactured, sold and imported by the country will be required to have the new pictorial warning on their packs.

According to an official research, a smoker looks at the image at an average of 7,000 times a year. Moreover, those who intend to take up smoking are discouraged, while the warning encourages those who want to quit.
The delegation of the British American Tobacco, the parent company of the PTC, was led by BAT Group Head Denato Del Vecchio. Minister of State for National Health Services, Regulations and Coordination, Saira Afzal Tarar was also present on the occasion.

The finance minister constituted the committee, headed by Tarar and comprising members from the Cabinet Division, Finance, Health Services and Federal Board of Revenue. It will look into the matter and give its recommendations within a week, according to the Ministry of Finance handout.

Meanwhile, the company cited tax revenues it contributes to the national exchequer as a tool to lure the finance minister to review the decision of enforcing the regulation. For the current financial year, the government has estimated collecting Rs103 billion from the tobacco industry.

In the last financial year, the government collected Rs90 billion from the tobacco industry. The PTC claimed that the government would be hit by an additional Rs15-20 billion annually if the decision was implemented.

The delegation pointed out that while the tobacco industry was paying taxes and contributing to the national revenue, sale of smuggled brands was already hurting their business which might receive a boost after implementation of new regulations. It said the new regulations will impact the legal sale of cigarettes, considerably cutting down revenue for the government.

“The government has not yet decided to extend the March 30 deadline,” Tarar told The Express Tribune. But she said the stakeholders, including growers, were concerned over the new regulations.

Young children’s perceptions of health warning labels on cigarette packages: a study in six countries



Health warning labels on cigarette packages are one way to reach youth thinking about initiating tobacco use. The purpose of this study was to examine awareness and understanding of current health warning labels among 5 and 6 year old children.


Researchers conducted one-on-one interviews with urban and rural 5 and 6 year olds from Brazil, China, India, Nigeria, Pakistan, and Russia.


Among the 2,423 participating children, 62 % were unaware of the health warnings currently featured on cigarette packages, with the lowest levels of awareness in India and the highest levels in Brazil. When shown the messages, the same percentage of participating children (62 %) showed no level of message understanding.


While youth are receiving social and informational messages promoting tobacco use, health warning labels featured on cigarette packages are not effectively reaching young children with anti-smoking messages.