Islamabad (TDI): The Pakistan National Heart Association (PANAH) has called on the International Monetary Fund (IMF) and the Federal Board of Revenue (FBR) to strengthen fiscal policies by increasing taxes on sugary drinks and tobacco.
As Pakistan continues negotiations on fiscal reforms with the IMF, PANAH emphasized the urgent need for evidence-based taxation policies to reduce the health burden caused by non-communicable diseases (NCDs) such as diabetes, heart disease, stroke, and kidney failure.
Research has consistently demonstrated that higher taxes on sugary drinks and tobacco result in a decline in consumption, leading to significant reductions in disease incidence and related healthcare costs.
Pakistan currently has the highest diabetes prevalence in the world, with over 33 million people diagnosed and an additional 10 million classified as pre-diabetic as of 2021.
Without immediate policy intervention, diabetes cases in the country are projected to rise to 62 million by 2045. Studies have shown that excessive sugary drink consumption alone increases the risk of diabetes by 30%, making taxation a critical tool for prevention.
Taxation as a Global Public Health Strategy
Speaking on recent reports suggesting potential reductions in tax rates, Maj. Gen. (R) Masud Ur Rehman Kiani, President of PANAH, warned that lowering taxes on sugary drinks and tobacco would contradict global best practices and scientific evidence.
He noted that over 85 countries have successfully implemented higher taxes on these products, achieving both public health improvements and increased government revenue.
“Reducing taxes on sugary drinks and tobacco would be a step backward for Pakistan’s public health,” stated Maj. Gen. (R) Kiani.
“The government must strengthen fiscal policies to protect its citizens rather than reversing the progress made in reducing the burden of NCDs. Fiscal measures have proven to be among the most effective public health interventions worldwide.”
He cited a 2022 World Bank modelling study on Pakistan, which found that increasing the excise tax on sugary drinks by 50% could generate significant health and economic benefits.
These include an annual health gain of 21 Disability-Adjusted Life Years (DALYs) per 10,000 people, economic value of health improvements estimated at USD 7 million annually and an increase in tax revenue of USD 51 million per year
Furthermore, the 20% excise duty on sugary drinks imposed in 2023 has already resulted in substantial revenue gains within the first six months of the 2024-25 fiscal year, demonstrating that such taxes not only improve public health but also strengthen the economy.
Based on the available scientific evidence, PANAH has urged the government to increase the federal excise duty (FED) on all sugary drinks to 50% of the retail price.
The association also proposed the introduction of a tax on ultra-processed foods, including Breakfast cereals, Margarines,Processed meats, Instant noodles, Potato chips, Candies and ice creams, Ready-to-eat meals.
Maj. Gen. (R) Kiani stressed that taxing these products could help reduce their consumption and, in turn, decrease the risk factors associated with chronic diseases.
PANAH remains committed to ensuring that public health is prioritized in fiscal policymaking and has urged the government to take decisive action to combat the rising NCD crisis in Pakistan.
Economic and Health Benefits of Taxation
Higher taxes on sugary drinks and tobacco have been widely recognized as an effective strategy for preventing NCDs while generating significant economic gains.
Countries that have implemented such measures have reported lower disease rates, reduced healthcare costs, and improved public health outcomes.
PANAH emphasized that Pakistan must adopt similar strategies to prevent a worsening public health crisis.
With the increasing burden of diseases linked to unhealthy consumption patterns, PANAH has called for stronger regulatory measures and sustained policy actions to ensure a healthier future for the nation.
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