Govt urged to resist pressure to reverse tax on beverages

ISLAMABAD: Claiming that the beverage industry has started making efforts to get the decision of imposing 10pc excise duty on sugary drinks under the Supplementary Finance Bill 2023 reversed, civil society activists and health professionals have called on the government not to give in to the industry.

They said 10pc duty was low compared to the health cost of obesity and diabetes in Pakistan but still, being the first positive step, it was appreciable.

The civil society activists and health professionals said Pakistan National Heart Association, Diabetic Association of Pakistan, International Diabetes Federation, Ministry of National Health Services, Pakistan Medical Association, World Bank, World Health Organisation, National Commission on the Rights of Children, SUN Civil Society Alliance and several other healthy food policy advocates have recommended increasing taxes on juices, carbonated beverages, squashes, syrups, energy drinks, iced tea and flavoured milk.

Pakistan National Heart Association General Secretary Sanaullah Ghumman said the beverage industry was using tactics to misguide policymakers to oppose increasing taxes on sugary drinks.

“The per capita fruits and vegetable consumption is low in Pakistan as the beverage companies misguide consumers through their marketing tactics and promote their juices and other drinks having high amount of sugar as alternative to fruits.

The World Health Organisation recommends consuming fruits and vegetables in their original form as a healthier option but not in the form of juices which were harmful to health,” Mr Ghumman said.

“Research from Mexico, South Africa and other countries shows that taxing sugary drinks will reduce the consumption of unhealthy beverages but increase the consumption of healthier alternatives like water and unsweetened milk. Research confirms that tax on sugary drinks have no net negative impact on economy or on the joblessness in the countries,” he said, adding that any resistance from the beverage industry on such taxes should be rejected in the best public interest.

Diabetic Association of Pakistan General Secretary Prof Abdul Basit said juices, including fruit juices, having high amount of sugar were equally harmful to health as other sugary drinks like carbonated beverages, squashes, syrups and other sweet drinks.

“The several research studies confirm that the regular consumption of juices and other sugary drinks are among the major cases of obesity, type 2 diabetes, heart diseases, several types of cancer, and liver and kidney diseases,” he added.

“Regular consumption of sugary drinks is posing serious threat to public health and economy of the country. As per International Diabetes Federation (IDF), more than 1,100 people are dying daily due to diabetes and its complication in Pakistan. The annual cost of managing diabetes was $2,640 million in Pakistan in 2021,” he said.

It is worth mentioning here that the International Diabetes Federation had already written a letter to policymakers in Pakistan to increase Federal Excise Duty (FED) on sugary drinks, including fruit juices, to help reduce disease burden and save precious lives.

Consultant at Food Policy Programme, Global Health Advocacy Incubator, Munawar Hussain said the modelling study by the World Bank in 2022 confirmed that raising FED on sugary drinks in Pakistan was very likely to improve population’s health particularly prevention of overweight/obesity, diabetes and cardiovascular diseases. There are substantial financial benefits both in form of tax revenue and added value of keeping people alive and healthy, he added.

The bank’s study also confirms that with the increase in FED, the average tax revenue for the next 10 years will significantly increase compared to the current revenue. For example, 50pc FED increase on all sugary drinks will generate a revenue of $810 million per year for the next 10 years in Pakistan. So there is no risk of financial loss to the country, rather the FED increase will support the economy and public health” he added.

Published in Dawn, February 19th, 2023