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March 14th, 2015:

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.

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