With the World Health Organization (WHO) reportedly considering a push for a global tobacco tax at a major meeting taking place next month, fresh opposition to the plan is emerging from new quarters: Pakistan.
Pakistan’s Daily Times notes that concern centers around the potential for WHO action to undercut Pakistani sovereignty, but also on the impact a WHO-spurred tax increase could have in terms of incentivizing greater consumption of illicit cigarettes, and threatening an important source of revenue for the unstable South Asian country.
“The main point of contentions is Article 6 that is directly hitting farmers by suggesting unprecedented increase in taxes and World Health Organisation (WHO) recommendation against tier system of tax.
’Though it is being proposed to increase tax on tobacco, the increase would be self-defeating, as it would lead to an explosion in illicit trade in tobacco products, resulting in a decline in tax revenues and an increase in youth smoking,’ said Ahsan Ullah Khan, President Sarhad Chamber of Commerce and Industry (SCCI).
The illicit and counterfeit cigarettes have already outgrown the legal industry in Pakistan that only last year contributed a whopping Rs 58 billion in lieu of certain taxes.
Sale of smuggled cigarettes in 2011 increased by 65 percent, going from 1,018 million to 1,685 million alone, while the overall illicit trade increased by 10 percent going from 18.7 percent to 20.6 percent of the market revenues.”
The article also notes that tobacco taxes are the main source of public financing in Pakistan, making it all the more concerning that the WHO agenda could, if implemented, undercut the ability of other spending priorities to be financed.
Illicit trade in cigarettes has also been linked by some experts to criminal elements and even terrorist cells — another major concern with regard to Pakistan, specifically.
The WHO did not deny it was pushing a global tobacco tax in a statement given to the Washington Free Beacon recently on the subject.
Tarik Jasarveic, a WHO spokesman, told the Free Beacon’s C.J. Ciaramella that:
“During the Conference of the Parties (COP5) of the Framework Convention on Tobacco Control (FCTC) from 12-17 November in Seoul, the Parties will discuss draft guidelines on Article 6 of the Framework Convention. While the outcome of the discussion cannot be foreseen, Article 6 talks about ‘Price and tax measures to reduce the demand for tobacco.’”
The WHO disputes the notion that the adoption of guidelines would undercut national sovereignty.
However, as the Pakistan Daily Times notes, “the document nonetheless advises member states to determine and establish their taxation policies, in accordance with Article 6.2 of the documents,” a move that would appear to undercut the WHO’s argument.
The WHO has reportedly also been encouraging countries including the Philippines, Vietnam, China and Cambodia to increase their cigarette taxes, suggesting the WHO does not see tobacco tax policy as purely the purview of individual UN member states.