The third tier of tobacco tax, introduced in 2018, was withdrawn in 2019 and replaced by a two-tier system in the 2019-2020 annual budget. This was due to the collaborated efforts of the Ministry of Health (MoH) with CSOs to build a counter-narrative to the tobacco industry’s statements of businesses stating how profits were being made by placing the most sold brands in the lowest tier of taxes. Now, only a two-tier system exists based on high- and low-costing brands, as was the case prior to 2018.
In April, the Prime Minister accepted a check for a US $35,450 donation from British American Tobacco (BAT) Pakistan for the dam fund and shelter home project. The donation was given just a month before the announcement of the federal budget.
A bilateral agreement between Pakistan and Indonesia in 2005 includes tobacco as one of the goods offered by Pakistan. In this annual bilateral trade amounting to US $170 million, Indonesia agreed to give unilateral concession on major exports from Pakistan, including a zero percent tariff on tobacco, among other goods.
The other incentive is allowing international travelers to bring 200 cigarettes, 50 cigars or 1/2 kilogram of tobacco in the country duty free.
There is no official record that the government does not accept assistance from the tobacco industry on conducting raids. However, unverifiable information states that FBR raids on smuggled cigarettes were supported by TI and had been raised in Parliamentary committee during tax discussion. The Chairman of the FBR did not deny it. However, this remains more of an “open secret” and there is no evidence to support this.
The MOH has defined in its standard operating procedures (SOPs) that it does not accept any requests for meetings from the tobacco industry. These SOPs are being introduced to other ministries and provinces. However, other ministries and departments, at the moment, do not have such policies yet. There is no registry for the tobacco industry, tobacco industry entities, affiliated organizations or individuals acting on its behalf.
The government does not prohibit contributions from the tobacco industry or any entity working to further its interests to political parties, candidates or campaigns or to require full disclosure of such contributions.
The SOPs have been available on the website since 2019. The government requires the tobacco industry to periodically submit information on tobacco production, manufacture, market share, marketing expenditures, revenues and any other activity, including lobbying, philanthropy, political contributions and all other activities. The Companies Ordinance 1984 of Securities & Exchange Commission of Pakistan (SECP) requires all public companies to publish quarterly financial data of production, manufacture, marketing expenditures revenues and other financial records. The other expenses such as contributions and charity work have to be included in the published annual statements.
- Awareness on Article 5.3 as an obligation: Effective implementation of the developed SOPs based on WHO Framework Convention on Tobacco Control (FCTC) Article 5.3 Guidelines to ensure transparency and to protect tobacco control policies from tobacco industry influence. Efforts to increase awareness should extend to include parliamentarians and all local government officials.
- Ban on CSR: There should be a complete ban on all types of CSR activities, including providing any contributions including political contributions, donations, gifts, technical advice, scholarships or study visits.
- Remove benefits to the tobacco industry: The Government of Pakistan should withdraw any and all tobacco-related incentives, including duty free, offered to international travelers. Also, the Government of Pakistan should not offer tobacco-related incentives in any trade agreements including bilateral. All existing trade agreements should be revised to withdraw such incentives.
- Ensure transparency in dealing with the tobacco industry. All meetings with the tobacco industry and their outcomes must be recorded and there must be a procedure to implement it.
- Treat state-owned tobacco enterprises like any other tobacco business. As stated explicitly in the Article 5.3 Guidelines, state-owned enterprises should be treated like any other tobacco business and not be given any incentives or privileges to conduct their business.
- Require the tobacco industry to provide information in a transparent and accurate manner regularly, about production, market share, marketing expenditures, revenues and any other activity, including expenditure on research and philanthropy.
- Require a registry of lobbyists and the tobacco industry’s lobbying expenditure.
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