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.