Pakistan Approves Higher Sweetened and Sugary Beverage Tax

Pakistan Approves Higher Sweetened and Sugary Beverage Tax

Obesity and non-communicable diseases (NCDs) have become a growing concern in Pakistan. With 41.3% of adults being overweight or obese, and 6 out of 10 deaths attributed to NCDs, there is an urgent need for government interventions. To address this, the Global Health Advocacy Incubator’s (GHAI) partner the Pakistan National Heart Association (PANAH) engaged and built a diverse coalition of organizations and advocates to successfully campaign for a stronger sugar-sweetened beverages (SSB) tax, which was passed this February as a part of the country’s 2023 Supplementary Finance Bill. The new policy, effective March 1, 2023, increases the existing excise tax on carbonated beverages from 13% to 20% and established a new 10% tax on fruit juices, syrups and squashes. Syrups and squashes, popular in Pakistan, are thick and viscous liquids with high amounts of sugar used to make a drink by adding water.

The rise in obesity and NCDs in Pakistan has become a significant public health challenge. Pakistan has the 3rd highest number of people living with diabetes globally, increasing from 6.3 million in 2011 to 33 million in 2021. If no immediate policy action was taken, this number was set to increase to 62 million by 2045. This is having an enormous impact on the country’s public health expenditures, as the annual cost of managing diabetes increased to more than $2.6 billion USD in 2021.

PANAH led an advocacy campaign and implemented various activities to increase support for the SSB tax, including building a coalition, engaging media, conducting rallies, writing joint letters to the Prime Minister, Finance Minister, Chairman Federal Board of Revenue and several policy makers and holding a blog competition to highlight the harms of the industry and the need for the tax. The coalition partners, including PANAH, Diabetic Association of Pakistan, International Diabetes Federation, National Commission on the Rights of Children, Ministry of National Health Services, Regulations and Coordination and Federal Tax Ombudsman, also amplified the voices of credible health professionals and championed parliamentarians to push for the tax. GHAI provided invaluable support to PANAH throughout the campaign, assisting in research dissemination, helping brief high level policy makers and communications support ranging from digital advocacy training to messaging. In addition, GHAI worked with PANAH to help counter the fierce industry opposition.

SSB Tax victory in Pakistan

To create a national conversation on the need for the tax, PANAH educated over 200 journalists about the issue, who wrote more than 1,000 articles. The news stories highlighted public support (78% of Pakistani adults) for increasing taxes on SSBs to reduce obesity and NCDs. The coalition hashtag #TaxSugarDrinksNotFuel trended on Twitter during a critical moment in the advocacy campaign. The coalition partners also published a joint appeal in national newspapers and engaged in high level meetings and technical discussions with key policy makers.

Advocates met significant opposition, as there had already been significant influence exerted by the beverage industry over the policy making process. Several politicians in the Senate standing committee on finance aligned with beverage industry interests by recommending halving the Federal Excise Duty (FED) on juices. Unexpectedly, diplomatic channels were used by the beverage industry to pressure the government, including from the commercial consulate of the United States Embassy in Pakistan.

Despite this, PANAH and its coalition partners secured a key victory in the fight to combat diet-related NCDs. While this was an important step, there is a need for improvement in the tax rates to cover all SSB categories. There may be opportunities with the 2023-24 finance bill, set to be presented and voted in the parliament in June 2023, and followed by a health contribution bill that earmarks SSB tax revenue toward health programs. The coalition partners will continue to counter industry opposition and strengthen and expand their partnerships to include more champions. GHAI will continue to support PANAH in their effort to amplify the voices of the youth, health professionals, parliamentarians, economic experts, religious leaders and civil society through earned and digital media to secure a healthier future for all Pakistanis.

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Tax on sugary drinks is a triple win for government; experts.

Tax on sugary drinks is a triple win for government; experts.

Islamabad: Increasing tax on sugary drinks can help generating significant revenue and reduce the hospital expenditure. The common man is not effected when tax is increased on sugary drinks as these are not necessary items and their consumption only add diseases burden and increase hospital expenditure. This was said by experts during the media session organized by Pakistan National Heart Association aimed to indicate gaps and propose way forward for sugary drink’s tax policy.

Pakistan ranks third highest in the world with more than 33 million people with diabetes. The annual cost of managing diabetes has increased to USD 2640 million in Pakistan. The PANAH’s General Secretary Sanaullah Ghumman said that for the last four decades, his association has been working to save the lives of people, especially the youth, from heart and other Non-communicable diseases (NCDs).

Sugary drinks are one of the major causes of these diseases, every section of society, media, health professional are raising their voices to reduce the consumption of these harmful drinks.

Munawar Hussain, Consultant, Global Health Advocacy Incubator, said that excessive consumption of sugary drinks is a growing threat to health and economy in the country. “increasing tax on sugary drinks is a triple win for the government, as the policy intervention does not cost anything to government, help reduce disease burden and hospital expenditure, and increase revenue” said Munawar.

“Government should consider increasing tax on all type of sugary drinks including carbonated beverages, energy drinks, flavored dairies, juices (including fruit juices), iced tea, squashes and syrups for better outcomes of the policy. Another important consideration is that water and unsweetened milk should not be taxed” he added.  

We further request the Government of Pakistan to increase the federal excise duty on sugary drinks to 50% so that the consumption of sugary drinks is reduced.

Speaking to the workshop, Dr. Khawaja Masood from the Ministry of Health that non communicable diseases are on the rise in Pakistan and we fully support fiscal policies aimed reducing the consumption of sugary drinks. “research shows that sugary drinks are among the major causes of obesity leading to type 2 diabetes, heart diseases, cancers and many other chronic diseases” he said.

“The consumption of flavored milk and yogurt is equally harmful to the public health as other sugary drinks. People should choose healthier alternatives like unsweetened milk, lassi and water” he added.

Aziz Alvi, representing the media, said that The beverage industry is using various tactic to oppose the tax on sugary drinks which are causing more and more diseases to the public. The media shall continue disseminating facts and exposing interference of the industry in the policy process.

“Panah is working for a good cause and we stand with Panah and the media will continue to play its role to make Pakistan healthy by supporting voices of public health advocates” he added.

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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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