Investment plan for Pakistan economy at the cost of killing People?

Investment plan for Pakistan economy at the cost of killing People?

A much needed tax requested by civil society which could save lives in Pakistan.

A country with more than 1100 people dying daily due to diabetes and its complications, the beverage industry is offering $200 million investments to Pakistani Finance Minister for not imposing new taxes. The civil society of Pakistan and health professionals rejects such tactics of the beverage industry which is not a good investment plan for Pakistan economy at the cost of killing people ie building a tremendous burden on the health sector and hence, economy of the country.

“As per International Diabetes Federation (IDF), the cost of management of diabetes has increased to more than $2640 million in Pakistan in 2021. Sugary drinks are among the major risk factors of diabetes, and other NCDs (non communicable diseases)” stated Prof, Abdul Basit, Secretary General, Diabetic Association of Pakistan (DAP). “IDF has recently written a letter to policy makers in Pakistan, requesting to increase federal excise duty on all type of sugary drinks to reduce the diseases burden and saving precious lives” he added.

The beverage industry has low taxes in Pakistan as compared to many countries regionally and globally. For example, Saudi Arabia and other gulf states have imposed 50% excise duty on sodas and 100 % on energy drinks. Even India has a higher tax on beverage industry than Pakistan which includes 28% sales tax and 12 % services a goods tax. More than 80 countries across the globe has already imposed high taxes on sugary drinks to discourage their consumption due to consequences on public health. The low taxes are encouraging the beverage industry to direct their investments to Pakistan creating serious threats to public health and economy of the country.

“While Pakistan government is facing a serious financial crunch, increasing tax on sugary drinks is a sensible strategy to not only reduce the diseases burden, but also generate significant revenue in the best public interest” said by Munawar Hussain, Consultant Food Policy Program at Global Health Advocacy Incubator. While referring to the modelling study done by the World Bank, he said “If government increases 50% federal excise duty on all sugary drinks, it will bring health gain of 8500 DALYs, economic value of USD 8.9 million to public health and USD 810 million average annual tax revenue for the next ten years” The sugar density based tax or health levy are also proved to be effective design of tax to reduce the diseases burden and generating revenue” he said.

Mr. Sana Ullah Ghumman, General Secretary Pakistan National Heart Association appealed to Finance Minister and Prime Minister of Pakistan for giving priority to Public health over the corporate interest by increasing tax on sugary drinks including sodas, energy drinks, juices, iced teas, flavored milk and squashes. “The beverage industry uses many tactics to misguide the policy makers to oppose taxes increase on sugary drinks. The research from Mexico, South Africa and Peru shows that taxing sugary drinks will reduce the consumption of unhealthy beverages but increase the consumption of heathier alternatives like bottled water and unsweetened milk. Research confirmed that tax on sugary drinks have no net negative impact on economy or on the joblessness in the countries those who increased the taxes. We fully support any proposal by FBR to increase federal excise duty or levy on sugary drinks which increases the price to minimum of 20% to consumers from the current prices”. he added.

    

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A window of opportunity to reduce the obesity crises amid IMF negotiations.

A window of opportunity to reduce the obesity crises amid IMF negotiations.

In recent years, the issue of obesity has become a major health crisis in Pakistan, with a growing number of people suffering from obesity-related diseases such as heart disease, diabetes, and cancer. The considerable volume of research suggests that sugary drinks have become among the major contributor to the growing obesity and related health problems like Type 2 diabetes in Pakistan. Average sugary drink of 500 ml contains 12 to 17 teaspoons of sugar. People who consume sugary drinks regularly have a 30 percent higher risk of developing type 2 diabetes.

“Since the government of Pakistan is now negotiating several measures with the International Monetary Fund (IMF) to overcome economic challenges, it is important to prioritize interventions which could help cut the expenses and also generate revenue to meet the short fall” said by Sana Ullah Ghumman, General Secretary at Pakistan National Heart Association. “Taxing sugary drinks is an evidence based intervention to reduce the health care expenditures and generating significant revenue for Pakistan. More than 80 countries around the world has already imposed taxes and impact is promising” he added.

“The rising consumption of sugary drinks is putting serious threat to public health and economy of the country. As per International Diabetes Federation (IDF), more than 1100 people are dying daily due to diabetes and its complication in Pakistan” said by Dr. Baseer Khan Achackzai, Director General Ministry of National Health Services, Regulations and Coordination. “Our Ministry have proposed the Ministry of Finance to increase taxes on sugary drinks. The increased cost of sugary drinks will encourage consumers to choose healthier alternatives, such as water or unsweetened beverages. This shift towards healthier choices will help to reduce the consumption of liquid sugar and improve the overall health of the population” he added.

The prevalence of obesity is at epidemic proportions in Pakistan, calling for urgent lifestyle intervention strategies to prevent and manage this important cardiometabolic risk factor. A study done based on the National Diabetes Survey 2016-17 by using WHO Asia Pacific cut offs revealed shocking results. Overall weighted prevalence of generalized obesity was 57.9% (42% in males and 58% in females) and central obesity 73.1% (37.3% in males and 62.7% in females). The highest prevalence of generalized obesity was found in Punjab 60%, followed by Khyber, Pakhtunkhwa 59.2%. Moreever, highest prevalence of abdominal obesity was observed in Baluchistan 82.1%, followed by Punjab 73.3%. Obesity (generalized and abdominal) was found significantly associated with diabetes, hypertension, and dyslipidemia. These are terrifying statistics throughout the country. To put an end to the spiraling obesity crisis that seems to be going out of control, the government must take all possible measure to reduce the further damage done.

“The research studies in the past had indicated a huge potential to reduce the health expenditure and generate revenue by taxing sugary drinks in Pakistan”. said by Munawar Hussain consultant Food Policy Program at Global Health Advocacy Incubator.  “For example, the study by world bank in 2022 revealed that if the government increases 50pc federal excise duty on all sugary drinks, it will bring an annual health gain of 8,500 disability-adjusted life years (DALYs) along with adding an economic value of $8.9 million to public health and $810 million average annual tax increase in revenue for the next 10 years.” He added.

Keeping in view of this potential and strategic nature of the intervention, the Pakistan government should increase significant tax (FED or levy) on all type of sugary drinks including sodas, energy drinks, juices, flavored milk and iced teas etc. Any resistance from beverage industry on such taxes should be rejected in the best public interest. Finally, the IMF and government may work closely with nonprofit organizations raising their voice on this important issue. By working together, these organizations can help to create a more cohesive and coordinated approach to addressing the obesity crisis in Pakistan.

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