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Tobacco Tax

Tripling tobacco taxes: Key for achieving the UN Sustainable Development Goals by 2030

Since the World Health Organization (WHO) adopted the Framework Convention on Tobacco Control (FCTC) a decade ago, over 180 countries have signed the treaty. Progress has been made in expanding the coverage of effective interventions–more than half of the world’s countries, with 40% of the world’s population have implemented at least one tobacco control measure, and despite increasing global population, smoking prevalence has decreased slightly worldwide from 23% of adults in 2007 to 21% of adults in 2013. How can greater reductions in smoking be achieved in the next decade and contribute to reaching the health and social targets of the UN Sustainable Development Goals (SDGs) by 2030? We review some key issues in the epidemiology and economics of global tobacco control.
Smokers face a three-fold higher risk of death versus otherwise similar non-smokers, resulting in a loss of at least one decade of life. While the hazards of smoking accumulate slowly, cessation is effective quickly. People who quit by age 40 get back nearly the full decade of life lost from continued smoking; quit by 50, get back six years; quit by 60, get back four years. Cessation is now common among adults in high-income countries. For example in Canada there are over 1 million more ex-smokers than just a decade ago. However, due in large part to the marketing and pricing strategies of the tobacco industry, cessation remains a major public health challenge in most low and middle-income countries (LMIC) where 85% of smokers live.

http://blogs.worldbank.org/health/role-excise-tax-meeting-sdg

Global annual cigarette sales rose from five trillion cigarettes in 1990 to about six trillion today. Cigarette production has increased by 30% in China since 2000, which consumes 40% of the world’s cigarettes. Global tobacco industry profits of about $50 billion – or $10,000 per tobacco death – enable it to access finance officials, fund pricing research, and run interference against tobacco control–summarised wonderfully by comedian John Oliver. Serious control of tobacco must counter these strategies on the basis of robust health, social and economic data that document the negative societal impact of tobacco use.

WHO has recommended a 30% reduction in smoking prevalence by 2025, which would avoid at least 200 million deaths by the end of the 21st century among current and future smokers. The only plausible way to reduce smoking to this extent would be to triple tobacco excise taxes in most LMICs. A tripling of the excise tax would roughly double the retail price and reduce tobacco consumption by about 40%. As of 2015, WHO reported that only 28 LMICs had comprehensive policies covering counter advertising, restrictions on public smoking, and on appropriately high taxes, and that few had made progress on raising taxes.

The common strategy of tobacco producers is to lobby governments to keep cigarettes affordable by keeping tax hikes below the rate of income growth, and by taxing different cigarettes at different rates to enable smokers to change to cheaper brands or lengths. Smart taxation needs to simplify taxes by adopting, ideally, a high, uniform excise tax on all types of cigarettes (both filter and nonfilter) to reduce downward substitution (let’s not forget, all cigarettes will kill you!). The Government of India has recently made modest tax reforms in this direction, the 2015 tobacco tax adjustment in China is reducing consumption and increasing fiscal revenue, and in 2016 World Bank teams supported the work of government teams in Armenia, Colombia, Moldova and Ukraine for the undertaking of comprehensive tax reforms that were approved by Parliaments, including reforms on tobacco tax structures and rate levels—additional work is being supported in other countries worldwide. Smart taxes can follow the example of Canada’s tax hike of about 5 cents a pack in 2014, as well as the Sin Tax Reform (both tobacco and alcohol) in the Philippines of 2012 that helped mobilize domestic resources to fund the expansion of universal health coverage. There have been other successes: Botswana, Ecuador, Mauritius, Mexico, and Uruguay, where local political champions, paired with expert taxation advice, achieved large tax hikes. South Africa also raised taxes in the last decade and has curbed consumption per adult by half.

Non-price interventions also play an important role as they help to reduce the social acceptability of tobacco use. Young American women took up smoking in large proportions in the 1960s and 1970s due in part to aggressive advertising (“The “Virginia Slims” epidemic”). Advertising bans or restrictions are likely one reason why young Chinese or Indian women have not yet done so. Australia has adopted plain packaging, and other countries are starting to follow this example. Simple questions on past smoking status to death certificates or to verbal autopsies could enable low-cost monitoring of the consequences of tobacco use in many populations.

Governments and international agencies with accumulated know how and expertise in data sciences such as the World Bank Group and OECD along with WHO could also help countries create accessible and independent sales, revenue and smuggling data sources as a basis for rational tobacco tax policy. Country finance officials should refuse advice from tobacco lobbyists to avoid falling into conflict of interest situations, as WHO recommends for health officials.

Implementing the FCTC more effectively in the next decade is required to raise cessation rates in LMICs. The World Bank recommended taxation as the core strategy in its 1999 publication, Curbing the Epidemic: Goverments and the Economics of Tobacco Control. Similar recommendations follow in recent reports on tobacco taxation by WHO, and by the International Monetary Fund. Building upon accumulated evidence and country experiences, a tripling of the worldwide excise tax might be the only way to achieve the 2030 UN Sustainable Development Goal of reducing non-communicable disease deaths by 30%!

Jamaica to evaluate WHO’s call for heavy taxation on tobacco industry

Health Minister, Dr Christopher Tufton says he along with stakeholders will be evaluating the call by the World Health Organisation (WHO) for heavy taxation on the tobacco industry.

http://jamaica-gleaner.com/article/news/20170124/jamaica-evaluate-whos-call-heavy-taxation-tobacco-industry

Addressing the WHO’s Executive Board in Geneva, Switzerland, yesterday Director-General, Dr Margaret Chan, said heavy taxation is one way of controlling tobacco use.

According to Tufton, Jamaica, which is a member of the WHO board, shares the concerns about the financial costs to treat tobacco-related illnesses and the associated cost to public health, globally and nationally.

He says any measure to discourage smoking and support public health is worth considering.

In a landmark report on the economics of tobacco and tobacco control, the WHO and the US National Cancer Institute concluded that smoking costs the global economy more than $1 trillion yearly.

The researchers also said smoking will soon kill more than six million people worldwide each year.

They show how tobacco control, through heavy taxation can save lives while generating revenues for health and development.

Hong Kong Department of Health Tobacco Control Zero Efforts

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Global tobacco control

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Tobacco stats for Hong Kong years 2013-2016

Clear the Air herewith provides our readers with Tobacco stats for Hong Kong years 2013-2016

sticks

The figures tell us that the Hong Kong Government preventative health measures are blatantly NOT WORKING.

The sales of duty paid cigarettes continue to spiral instead of decreasing.

The Government takes over $6 billion in tobacco excise taxes then throws only crumbs to tobacco control and prevention resources – the $6bn remainder goes to pouring white elephant concrete.

The excise tax is manifestly insufficient for a 1st world country with such a high cost of living. Hong Kong needs to match Australia, New Zealand, UK , Ireland excise tax levels to have a preventative effect.

Hence tobacco remains affordable to youth here whilst Government apathy and lack of political will to act reign supreme. A form of misconduct in public office for their failure of duty of care to the people.

Meanwhile there is no apparent political will to force a legislative change to place the onus on landlords to prevent smoking in their licensed premises (whereas on the Mainland they have such laws).

As long as people can go out and smoke in places of entertainment with negligible chances of being caught, they will continue to do so.

Abysmal state of affairs. The highly paid incumbents would have been fired long ago in a business enterprise.

Smoking Rates May Decline With Higher Tobacco Taxes

If all countries raise excise taxes on tobacco products, smoking rates may decline by up to 9%.

http://www.thecardiologyadvisor.com/prevention/smoking-rates-drop-tobacco-high-taxes/article/631011/

Smoking kills about 6 million people a year, and costs the world more than $1 trillion a year in health care expenses and lost productivity, but billions of dollars and millions of lives could be saved through higher tobacco prices and taxes, according to a report from the World Health Organization (WHO) and the US National Cancer Institute.

“The economic impact of tobacco on countries, and the general public, is huge, as this new report shows,” Oleg Chestnov, MD, PhD, the WHO’s assistant director-general for noncommunicable diseases and mental health, said in an agency news release. “The tobacco industry produces and markets products that kill millions of people prematurely, rob households of finances that could have been used for food and education, and impose immense health care costs on families, communities, and countries.”

Annual tax revenues from cigarettes globally could increase by 47%, or $140 billion, if all countries raised excise taxes by about 80 cents per pack, according to the report.

The report authors predicted this would raise cigarette retail prices an average of 42%, leading to a 9% decline in smoking rates and up to 66 million fewer adult smokers.

Poorer countries suffer the greatest burden from tobacco use. There are 1.1 billion smokers aged 15 years or older worldwide, and 8 out of 10 of them are in low- and middle-income countries.

The research summarized in this report “confirms that evidence-based tobacco control interventions make sense from an economic as well as a public health standpoint,” report co-editor Frank Chaloupka, PhD, professor of economics at the University of Illinois at Chicago, said in the news release.

Stubbing out tobacco usage

Myanmar is experiencing tremendous economic growth. With a young, growing population and a liberalised economy, it has been slated as one of 20 “markets of the future” that will offer the most opportunities for consumer goods companies.

http://www.mmtimes.com/index.php/opinion/24471-stubbing-out-tobacco-usage.html

Tobacco has been identified as one of Myanmar’s top 20 key industries. Its market size is worth an estimated US$450 million – up there with dairy products and dried processed foods. The compound annual growth rate from 2013-18 for tobacco is 16 percent, overtaking apparel (14pc) and consumer appliances and electronics (15pc).

With market liberalisation, British American Tobacco (BAT) re-entered Myanmar in 2013 a decade after it exited the country. When re-establishing itself in the country, it announced that it will invest $50 million in a tobacco manufacturing factory. BAT already has a significant 22pc market share in the growing cigarette market.

Myanmar currently has over six million smokers. Like other Asian countries, a high percentage – 44pc – of adult men smoke. This number is set to increase given the growing adolescent smoking population.

In 2010 cigarette sales in Myanmar were about 13 billion sticks, but these sales are projected to almost double to 25 billion sticks in 2018. Myanmar’s projection is the highest increase among all ASEAN countries. This is bad news for the public health system given that Myanmar already has more than 70,000 tobacco-related deaths annually. Myanmar also has the lowest Human Development Index among Asian countries with a global ranking of 148 out of 188 and public health expenditure is a low 1.8pc of GDP.

Myanmar is a typical developing country in that the bulk of smokers are from the lower-income category. Cigarettes are also extremely cheap in Myanmar and within easy reach for the poor. The most popular pack of cigarettes costs only $0.57. A survey on smoking indicates that about 40pc of Myanmar’s youths can purchase cigarettes from a store. Even more worrying is that 15pc of non-smoking youths have indicated that they intend to start smoking next year – again the highest percentage in the ASEAN region.

Myanmar has some basic tobacco control measures in place to address the problem. Since ratifying the global tobacco treaty in 2004 – the WHO Framework Convention on Tobacco Control (FCTC) – the country has passed legislation banning all tobacco advertising and making public places smoke-free, but there is still plenty of room for improvement.

Myanmar needs to further increase taxes on tobacco products and put it out of reach for the poor and youths. While tobacco advertising and promotions are banned, there are loop holes that can be exploited. Myanmar faces sleek marketing tactics from transnational tobacco companies who take advantage of government officials’ inexperience.

For example, in 2016 Myanmar passed legislation requiring a pictorial health warning on tobacco packs. Japan Tobacco International placed an announcement in a newspaper in October on how it will be complying with the Health Ministry’s requirements. The announcement showed photos of all its packs with and without the pictorial health warnings – an outright advertisement for its brands.

Penalties for violations are miniscule for wealthy tobacco companies. Even if authorities act against a company for non-compliance of pictorial health warnings, the fine is a paltry $7.95 for the first offence.

This is where civil society groups come into play, they should play a more prominent role in exposing the unethical and exploitative practices of transnational tobacco companies operating in Myanmar.

It is important for Myanmar to keep abreast of ASEAN countries’ achievements on tobacco control measures. Most countries have already banned advertising at points of sale. Brunei, Thailand and Singapore have banned pack displays at retail outlets.

These are the next steps for tobacco control in Myanmar. But Myanmar lacks the resources needed for enforcement – particularly staff. It is the only country in the ASEAN region that has not committed national funds for tobacco control efforts. Strengthening tobacco control measures and allocating more resources to enforcement will send a strong message to the public and private sector that the government is serious about protecting public health from the ravages of tobacco.

Tobacco tax hike hits smokers hard

http://times-age.co.nz/tobacco-tax-hike-hits-smokers-hard/

Making tobacco products more expensive to buy is a proven way to prod smokers into giving up the habit, Wairarapa list MP Marama Fox says.

The anti-smoking advocate said Quitline, the organisation that helps New Zealanders give up smoking tobacco products, received more calls when prices jumped up.

At the start of the year the cost of cigarettes rose 10 per cent, a move it will make annually until 2020.

It is a part of a bid to help New Zealand reach its 2025 target – to have fewer than 5 per cent of the population smoking.

“The ongoing impact on families with low income is the incentive to quit…” Ms Fox said.

“The cost to our families, through sicknesses and illness, exceeds the cost of cigarettes.

“If we can ensure our whanau have the right incentive and support to quit, then we can save our families the cost of the burden of illness and disease and the loss of our people through death.”

Ms Fox said she wants to see more voluntary smoke free communities in New Zealand.

She credited stores that refused to sell cigarettes as making “a brave move”.

“A number of vendors around the country have chosen not to go there, they see the benefits in the lives of their families, and they don’t want to be providing cigarettes for our whanau.”

Ms Fox believes we are on track to meet the 2025 goal, which she said has already been achieved in certain areas.

“We are already meeting that target in a number of communities, sadly, not Maori communities overall.

“The numbers of Maori smoking are coming down, it is slower than the rest of the population but it is continuing to decrease.”

Ms Fox said vaping and e-cigarettes should be used as reduced harm measures, encouraging people to ditch smoking cigarettes.

“We want to be careful when the introduction of this comes through… not to be enticing young people into something that looks cool,” she said.

Ms Fox said they should be a “cessation product first and foremost”.

Price hike alert: GCC gears up for higher taxes on tobacco, soft drinks, luxury cars

New taxes will be added to the existing ones, which are 100 percent on tobacco and alcohol, and that the total taxation on such products will become 200 per cent. (Pixabay)

http://www.albawaba.com/business/cigarette-tobacco-gcc-tax-price-hike-soft-drinks-luxury-cars-923098

The six-nation Gulf Cooperation Council (GCC) is gearing up to double the taxation on certain items like cigarettes in the coming months.

The GCC will gradually implement a selective tax on 93 commodities starting the second quarter of this year and expand to cover all member countries by the beginning of 2018, said Abdulrahim Al Naqi, secretary-general of the Federation of Chambers of GCC.

According to the Saudi budget document published recently, “the GCC countries have already agreed to implement selective taxes on tobacco, and soft and energy drinks during the current fiscal year 2017″.

Al Naqi revealed that the list of items that will be taxed includes energy drinks, tobacco and luxury cars. He explained that each GCC country will determine the value of its own selective tax.

Khaleej Times has further learned that the tax will be added to the existing tax, which is 100 per cent on tobacco and alcohol, and that the total taxation on such products will become 200 per cent.

Last week, the Saudi Ministry of Finance clarified that the tax will be imposed only after the ratification of the uniform agreement on selective tax and the issuance of the domestic rules of procedure in line with the decisions adopted by the Supreme Council of GCC leaders. The proposed date for its implementation is April 2017, the statement added.

Al Naqi said there is a need to spread awareness among the region’s residents as well as the private sector before the implementation of the decision.

The UAE currently imposes 100 per cent tax on tobacco products. The GCC tax code includes 50 per cent taxes on soft drinks and 100 per cent taxes on power drinks, tobacco and its derivatives.

By Mustafa Al Zarooni

Next chief executive should back annual tobacco tax hike in Hong Kong

Your editorial (“Preventive health care is an investment, not a burden [1]”, January 1) has hit the nail on the head regarding the importance of, and investment in, prevention versus cure in Hong Kong.

We all need the “ambulance and curative services” to rescue us when we are taken ill, but unless the whole of government – particularly the finance, trade and economic branches, as well as the Independent Commission Against Corruption and the Ombudsman – grasps the political nettle of issues such as tobacco control, health will never improve, nor will the many thousands of annual deaths from tobacco be reduced.

Indeed, the entire Hong Kong government is under an international obligation to do so, being a party to the World Health Organisation Framework Convention on Tobacco Control.

One of the most important platforms of any incoming chief executive is their future preventive health plan for Hong Kong citizens.

Let us call upon each of the potential chief executive candidates to outline their health platforms. We should discard all those who see these platforms in terms of more hospital beds, which will never solve the problem of improving Hong Kong’s health. And the current health paradigm is such that improvements will only come about by addressing the vested interests of big business – the tobacco, alcohol, food, and even salt industry –including their often unrecognised front groups.

With tobacco control, we have known for decades what works, and how very cost-effective these measures are. Yet governments around the world hesitate to act.

Increasing tobacco tax heads the list of the best single measure to reduce smoking. It may be surprising to many that a fiscal measure is more important than health education in schools or banning sales to youth, for example, but it is the single best action governments can take to reduce consumption among the young.

Why can Hong Kong not follow Australia and New Zealand and commit to an annual tobacco tax increase of, say, 10 per cent per annum to the year 2025?

Any chief executive candidate who would endorse this would get my (hypothetical) vote.

It would give us an orderly and planned route to follow, and avoid the incredible waste of time and energy lobbying annually for tobacco tax increases. And it would have a massive effect in saving young and middle-aged lives, and in what is termed “frailty avoidance” in the elderly.

Dr Judith Mackay, Clear Water Bay