Tobacco Tax
Tobacco group trashes House sin tax bill
http://www.manilatimes.net/tobacco-group-trashes-house-sin-tax-bill/302238/
The Philippine Tobacco Growers Association (PTGA) reiterated its strong objection to the House-approved bill proposing a huge increase in cigarette excise taxes while keeping the two-tier structure even as its president Saturnino Distor disowned press reports maliciously attributing to him statements supporting the measure.
“We have not changed our position. We strongly oppose House Bill 4144 as this will only bring hardship to the farmers still reeling from the huge tax increase in 2013,” Distor said in a statement.
“I also condemn the unauthorized use of my name and the attribution to me of statements that are contrary to my views. This is the product of malicious minds serving vested interests,” he added.
Distor was quoted in media reports as throwing his support behind HB 4144 in his capacity as the Pangasinan Chapter President of the National Federation of Farmers Association and Cooperatives. (NAFTAC).
He said he has not changed his position, which he publicly stated during the hearing of the House Ways and Means Committee last Dec. 5.
“Our position is stated in Congress and is a matter of public record,” Distor said.
In fact, he said he refused to sign a position paper supporting House Bill 4144 that was offered to him by the National Tobacco Administration (NTA) during the House committee hearing.
“I repeat, the tobacco farmers will bear the brunt of this bill,” Distor said.
Earlier, public health think tank HealthJustice Philippines accused legislators of railroading a bill that would allow cigarettes to remain dirt cheap in the Philippines, contrary to the Philippine health agenda and Duterte’s promise of a Smoke Free Philippines.
May Fernandez-Mendoza, HealthJustice president, said that House Bill 4144 was approved without amendment during second reading on December 5.
It sought a P7 increase in excise taxes to P32 and P36 from the current P25 and P29 with marginal increases of 5 percent per year instead of marginal increases of 4 percent per year based on RA 10351,the current Sin Tax Law which is scheduled to bring taxes to a single rate of P30 in 2017.
Rep. Eugene de Vera of ABS Partylist sponsored the bill which was supported by all those in the super majority.
Another bill filed by Rep. Joey Salceda pushed for P40 with P5 increase per year but this was not passed during the plenary hearing.
“There is an illusion of significant increase in taxes but in reality, this is a ruse to preempt ideal taxes for health that President Duterte, being a strong tobacco control advocate, is capable of calling for,” Mendoza said.
“If this is made in line with the Philippine Health Agenda to reduce harm from tobacco use, taxes on tobacco, should be at least P40, hence significant enough to discourage smoking and bring the Philippines out of the category of those countries having the cheapest cigarettes in the world. It should also call for significant annual increases,” she added.
In 2010, a HealthJustice study projected that, in order to achieve a periodic 10 percent reduction in smoking prevalence or save 200,000 lives annually and reducing 500,000 smokers annually, taxes should have reached a unitary rate of P30 by 2014, to be increased annually based on inflation and income growth.
“However, the deliberation of the Sin Tax bill went through a lot of compromises due to the tobacco industry lobby, and was watered down such that the rate of P30 would take effect only in 2017. To make up for the lost lives, we propose a minimum of P40 excise tax per pack as a starting point in 2017,” Irene Reyes of HealthJustice said.
Mendoza also pointed out that incremental revenues from any tobacco tax increase should go back to the health sector in the form of health promotion, to strengthen communities’ capacity to undertake health initiatives and to have healthy cities.
“Investments must be made to prevent Filipinos from getting sick,” she added.
“The price of cigarettes in Philippines is cheap. If we want to protect the youth, we need to break the P100 per pack price barrier,” said Dexter Galban of One for Nursing Empowerment, a group of nursing students from universities in the Philippines.
Internal tobacco industry documents show that the industry targets the youth as replacement smokers.
According to a survey HealthJustice conducted, the youth will stop smoking if prices of cigarettes are at P5-10 per stick or P100-P200 per pack. Price of a pack of cigarettes averages between P36-65 per pack in the Philippines while it is between P100-450 in countries that are committed to stop smoking, such as Thailand, Singapore, Australia, and USA.
It has also been established that smoking contributes to poverty. A 2008 DOH study shows that the total economic costs for the four smoking-related diseases were estimated at P188 bilion a year. The total collection from tobacco products averages at P120 bilion a year and an average of P 75 billion goes to health.
Do the right thing: Tax tobacco!
Both my grandfathers smoked when they were young. My father’s father was a shopkeeper who smoked a pipe and my mother’s father was a smallholder who smoked cigarettes. Both died of heart failure and left my grandmothers as widows. My father grew up as a little boy in an atmosphere of pipe smoke and sometimes I wonder whether this contributed to his asthma and his own heart problems. My mother became a doctor, a cancer specialist, and she always used to tell my brother and me that we should never smoke, because she saw every day what smoking had done to her patients.
http://blogs.worldbank.org/europeandcentralasia/do-right-thing-tax-tobacco
In Moldova, 87 percent of deaths are attributable to diseases associated with tobacco. I am not saying that tobacco caused them all, but these deaths are caused by diseases to which tobacco contributes. Also, in Moldova 43 percent of men smoke, while for women it is 5 percent. The worry is that nowadays a lot of the growth in smoking is among women.
It’s interesting that very many Moldovans begin to smoke when they are children. 30 percent of kids in class 8 or class 9 have already smoked a cigarette. And this is possible because smoking is so easy. It’s so cheap. It’s cheaper than buying a bottle of Coke or a chocolate bar. So obviously smoking is very attractive to young people in Moldova. We can discourage young people from beginning this dangerous and addictive habit by making cigarettes more expensive.
Smoking eats up 5 to 10 percent of the public health budget. That’s our estimate of the cost of treating diseases caused by smoking. The World Bank has looked at many scenarios of how raising tobacco taxes would increase Government revenues. Without going into details, it’s quite possible to raise at least an extra 1 percent of GDP.
So raising tobacco taxes could protect the lives of our children and grandchildren, save on health spending and raise revenues.
If somebody votes against increasing tobacco taxes, it could be for three reasons. Two of them are wrong. Only the third one is solid.
The first one is a fear that there might be political resistance to an increase in taxes. But anybody who opposes tobacco taxation for fear of the political resistance has to answer this question: “Can you find another way to improve the budget by at least one percent of GDP which would create less political resistance?” One could raise VAT or income tax, but that would be politically even more difficult than increasing tax on tobacco.
The second reason for opposition to an increase in tobacco taxes would be for fear of smuggling. We know about smuggling. We know how cigarettes enter Moldova through Transnistria. Maybe two or three years ago this argument would have been convincing. But now, Moldova and Ukraine have made significant progress in border cooperation and have monitoring systems which make this business much more difficult – if there is political will.
There is only one strong reason for opposing an increase in tobacco taxation. And that is because one is influenced by the tobacco lobby. The only real source of resistance to an increase in tobacco taxation is the tobacco industry. I therefore think that it is the obligation of anyone who blocks an increase in tobacco taxation to explain to the population why they are so opposed to it.
From a speech by Alex Kremer, World Bank Country Manager for Moldova, at Moldova’s parliament on 6 December 2016.
Seven years of progress in tobacco control
“Findings In total, 88 countries adopted at least one highest level MPOWER policy between 2007 and 2014, resulting in almost 22 million fewer projected SADs. The largest number of future smoking attributable deaths (SADs) averted was due to increased cigarette taxes (7.0 million), followed by comprehensive smoke-free laws (5.4 million), large graphic health warnings (4.1 million), comprehensive marketing bans (3.8 million) and comprehensive cessation interventions (1.5 million).”
http://tobaccocontrol.bmj.com/content/early/2016/12/09/tobaccocontrol-2016-053381
Abstract
Objective
Since WHO released the package of six MPOWER measures to assist nations with implementing the WHO Framework Convention for Tobacco Control (FCTC), 88 countries adopted at least one highest level MPOWER measure. We estimated the subsequent reduction in smoking-related deaths from all new highest level measures adopted between 2007 and 2014.
Methods
Policy effect sizes based on previously validated SimSmoke models were applied to the number of smokers in each nation to determine the reduction in the number of smokers from policy adoption. On the basis of research that half of all smokers die from smoking, we derived the smoking-attributable deaths (SADs) averted of those smokers alive today.
Findings
In total, 88 countries adopted at least one highest level MPOWER policy between 2007 and 2014, resulting in almost 22 million fewer projected SADs. The largest number of future SADs averted was due to increased cigarette taxes (7.0 million), followed by comprehensive smoke-free laws (5.4 million), large graphic health warnings (4.1 million), comprehensive marketing bans (3.8 million) and comprehensive cessation interventions (1.5 million).
Conclusions
These findings demonstrate the immense public health impact of tobacco control policies adopted globally since the WHO-FCTC and highlight the importance of more countries adopting highest level MPOWER measures to reduce the global burden of tobacco use. Substantial additional progress could be made, especially if heavily populated nations with high smoking prevalence were to reach highest level MPOWER measures.
Hong Kong leads mainland in war to cut smoking
http://www.ejinsight.com/20161209-hong-kong-leads-mainland-in-war-to-cut-smoking/
When a person goes to buy a packet of cigarettes in Hong Kong, he or she faces two obstacles. One is the price — Double Happiness at HK$43 and Marlboro at HK$57 — the result of a tobacco tax up to 68 per cent of the price.
The other is the hideous image on the packet of the worst consequences of smoking.
A survey by the Economic Intelligence Unit earlier this year ranked Hong Kong as the eighth most expensive city in the world for a packet of branded cigarettes, at US$7.48.
Top was London with US$14.30, followed by New York with US$13.67 and Singapore with US$9.15.
These two measures, along with the creation of smoke-free areas in public and work places, have been effective in cutting the number of smokers.
According to government figures, the percentage of daily cigarette smokers aged 15 and above in Hong Kong in 2015 was 10.5 percent, down from 10.7 percent in 2012 and 23.3 per cent in the early 1980s.
The mainland, the world’s largest tobacco market with 316 million smokers in 2015, has only recently started to learn the lessons of Hong Kong.
Since 2010, the number of smokers has increased by 15 million and cigarette production risen by 35 per cent.
The health warnings are written, not visual, and appear modestly at the bottom of the packet. They would not frighten any first-time user.
In 2015, China increased the tobacco tax to 40 per cent. Consumption tax from tobacco in 2015 was 536 billion yuan, an increase of 60 billion from a year earlier. The recommendation of the World Health Organisation (WHO) is that the tax should be 70 per cent of the retail price.
“There is certainly room for future tobacco tax increase,” said Jian Shi, director of the information office of the Taxation Research Institute at the State Administration of Taxation in Beijing.
“In some western countries, the tobacco tax rate has reached 70-80 per cent. The room for the increase needs to be considered based on the development goal of the industry and the condition of national revenue.”
Health professionals argue that increasing the tobacco tax is the quickest and most effective way to cut smoking — by both preventing young people from starting and encouraging smokers to quit.
According to WHO figures, each increase of 10 per cent in the price will cause 3.7 per cent of adults and 9.3 per cent of teenagers to stop smoking.
Antonio Kwong Cho-shing, chairman of the Hong Kong Council on Smoking and Public Health, said that selective or modest hikes would not make much of an impression on smoker numbers in Hong Kong.
“Only a 100 per cent increase in tobacco tax would induce people to quit smoking,” he said. If the government accepted this proposal, an average pack would cost HK$119.
The Department of Health has proposed an enlargement of the health warning.
It said on Nov. 23 that the area of the graphic health warning shall be of a size that covers at least 85 percent of the two largest surfaces of the packet or the retail container and that the number of forms of health warning should be increased from six to 12.
The situation in the mainland is years behind. The biggest obstacle is that the State Tobacco Monopoly Administration (STMA), the world’s biggest manufacturer of cigarettes, is also the industry regulator.
This is despite years of lobbying by China’s health professionals, the WHO and the norms practised around the world. They argue that the two must be separate institutions.
According to WHO figures, 1.2 million die each year in China from smoking-related diseases; this number will double by 2025.
Jian Shi put it succinctly. “The major difficulty lies in that the related departments have quite different views on this matter, and it is difficult for them to reach agreement on this matter. That will cause obstruction to policy making and implementation.”
The STMA opposes graphic health warnings and higher taxes because they would hurt its sales and profits. Yet, simply due to global population expansion, there will be more smokers in 2040 than there are today, so it is difficult to believe that this concern is genuine.
The health lobby has had some success, in the modest increase in tobacco tax and restrictions on smoking in indoor public areas and workplaces and some outdoor areas introduced in Beijing in June 2015. Other mainland cities have taken similar measures at different times.
On Dec. 6, the Beijing Commission of Health and Family Planning said that more than 2,700 people had been fined for violating these restrictions, with total fines of 142,500 yuan, as of Nov. 30 this year.
Professor Dr Judith Mackay, based in Hong Kong and Asia’s leading anti-tobacco campaigner, said that the price of cigarettes in China is still extremely low.
“The latest small tobacco tax increase, while laudable, will not have a serious, sustained effect on reducing smoking. It is time to review the whole tobacco tax structure in China, significantly increase the price of cigarettes and thus protect the health of the Chinese people.
“In Australia, there is a regular increase of 12.5 per cent tobacco excise tax every year. The cost of a packet could soon rise to A$40 (HK$230). Hong Kong and China should both consider long-term tobacco tax planning in this way, so that tobacco control proceeds in an orderly form, and immense energy and time is not wasted year by year in campaigning for a tax increase. Otherwise, thousands will die.”
Michael Bloomberg Pledges $360 Million To Fight Tobacco
Michael Bloomberg, the former mayor of New Y ork City, has declared was on tobacco use around the world. The billionaire philanthropist has donated $360 million to fight tobacco use around the world.
The funds will be distributed from 2017 through 2022 and will be used for a campaign to promote higher tobacco taxes and laws banning smoking in public in poorer nations. As mayor of New York, Michael Bloomberg pushed through significant increases in that city’s tobacco taxes.
While Western nations and their cities have engaged in aggresive anti-smoking campaigns over the last forty years, banning public smoking, increasing taxes and so forth, the developing world has lagged far behind in the global efforts to curb smoking.
“Reducing tobacco use is one of our greatest opportunities to save lives and prevent suffering, because we know that strong policies really do make a difference,” Bloomberg said. “Since we began working ten years ago to pass effective tobacco measures around the world, global sales of cigarettes have declined after a century of steadily increasing. The tide is turning on tobacco, but we still have a long way to go – especially in low- and middle-income countries that are home to 75% of the world’s smokers and where tobacco companies are working harder than ever to find new customers.”
He has now donated almost $1 billion to his anti-tobacco crusade.
The Bloomberg Initiative to Reduce Tobacco Use boasts that to date it has successfully supported 59 countries in passing laws or policies, reaching nearly 3.5 billion people and saving an estimated 30 million lives.
Bloomberg Philanthropies sates that it has aided 39 countries in passing smoke-free laws. These nations include Turkey, where a survey found that the number of smokers declined by 1.2 million from 2008 to 2012. The foundation also reports that 32 countries have passed laws requiring graphic warning labels on tobacco packages, like India, which implemented such warnings covering 85% of both sides of cigarette packages. Also, 22 nations have passed bans on tobacco advertising and sponsorship, like Brazil. Major cities like Beijing and Shanghai have also passed legislation mandating smoke-free places.
In 2003, as mayor of New Y ork, Michael Bloomberg signed the New Y ork City Smoke-Free Air Act banning smoking in bars and restaurants. By 2013, the Bloomberg Administration increased the tax on cigarettes, launched anti-smoking advertising campaigns, and distributed free nicotine patches. Statistics show that these moves led to an overall smoking decline in the city of 28%, from 21.5% in 2002 to 13.9% in 2014. There were more than 400,000 fewer smokers in 2014 than in 2002. Teen smoking fell by more than 50% from 2001 to 2013.
“Mike Bloomberg has spent over a decade leading the fight against the harms of tobacco throughout the world,” said philanthropist and anti-tobacco partner Bill Gates.
“Tobacco-caused diseases are one of the greatest health challenges facing low and middle income countries. The good news is Bloomberg Philanthropies and its partners know how to implement proven solutions. Thanks to Mike Bloomberg, millions of lives will be saved.”
8 Million Smokers Quit After Tax Hike in Philippines
Tax hikes on cigarettes have forced my Filipinos to quit, but it now seems manufacturers may be trying to flood the market before another round of tax hikes hits.
http://www.taxationinfonews.com/2016/12/8-million-smokers-quit-after-tax-hike-in-philippines/
In a recent interview the president of the Philippine Society of General Internal Medicine Antonio Miguel Dans reportedly claimed that as many as 8 million locals have quit smoking due to the effect of tax hikes on the sale of tobacco.
The latest round of tax hikes on the sale of tobacco occurred in 2012, and were aimed specifically at reducing consumption of tobacco in the country.
In 2012 the estimated smoking rate in the country was approximately 31 percent, while it has now dropped to 23 percent, a drop equivalent to approximately 8 million people.
The supply of cigarettes in the Philippines between 2012 and 2015 fell by an estimated 25.9 percent.
However, over the course of 2015 the supply had risen by 9.1 percent, as manufacturers front-load their supplies now, in order to circumvent the hoked tax rates which will be enacted next year.
The Minister also said that the tax has been supplemented by new regulations requiring packets of cigarettes to be affixed with graphic labels showing the negative effects of smoking, a measure which has also had a positive effect on smoking cessation.
Think tank: Big-time increase in cigarette taxes to force smokers to quit
http://business.inquirer.net/220377/think-tank-big-time-increase-cigarette-taxes-force-smokers-quit
Public health policy think-tank HealthJustice Philippines Monday pushed for a single-tier tax system for tobacco products, saying other proposed systems would not make smokers quit.
HealthJustice, which won the Bloomberg Award for Global Tobacco Control in 2012, said the industry-proposed two-tier tobacco tax system, which assigns lower tax rates to cheaper cigarettes or those on the “lower-tier,” would not be effective at curbing smoking.
“The two-tier tobacco tax system that the tobacco industry has been pushing for is ineffective and will not encourage smokers to quit or reduce consumption of tobacco products,” HealthJustice consultant Bianca Bacani said in a statement.
Based on government projections, the current multi-tier tax system would eventually shift to single tier by going through a two-tier stage first.
For example, a two-rate structure of P14 and P30 per pack of cigarettes would be implemented for a period of two years, moving on to a uniform rate of P30 per pack on the third year.
“If we don’t make tobacco products substantially more expensive, smokers will continue to shift to cheaper cigarettes instead of shift to a healthy lifestyle,” Bacani said.
She said smokers would sustain their habit and keep smoking. They would even reduce the number of cigarettes they consume.
“This is called downshifting, and it has taken place in many countries after they imposed the two-tier tax tobacco tax,” Bacani said.
HealthJustice also noticed that, as early as 2012, the Department of Finance reported that downshifting in alcohol and tobacco products caused the government to lose P32 billion in revenues.
Secret report shows Big Tobacco targeted city politicians in Sudbury and Sault
Algoma municipalities are being asked to stub out all motions proposed by tobacco companies or front groups that slip demands for a freeze on excise taxes into campaigns against contraband tobacco.
https://www.sudbury.com/around-the-north/leaked-report-reveals-big-tobacco-targeted-city-politicians-in-sudbury-and-sault-473527
Leaked map shows 10 Ontario ‘strategic municipalities’ whose local politicians were targeted in 2012 by Imperial Tobacco Canada. Reasons for selecting these targets included their ‘proximity to illicit tobacco’ and ‘likelihood of buy-in.’
Greater Sudbury has the dubious distinction of being named in a secret Big Tobacco document aimed, ostensibly, at fighting contraband smokes, but at the same time quietly lobbying to freeze the excise tax on legitimate tobacco products.
Algoma Board of Health, the governing body of Algoma Public Health, is warning area politicians about new evidence linking Imperial Tobacco Canada Ltd. to lobbying campaigns against contraband tobacco.
The health board voted this week to ask Algoma municipalities to reject all motions received from tobacco companies or front groups that spike campaigns against illicit smokes with demands for a tobacco excise tax freeze or limits on regulation of tobacco products.
Imperial Tobacco Canada Ltd. is a wholly-owned subsidiary of British American Tobacco Plc., one of the world’s five biggest tobacco companies with 55,000 employees in 44 factories in 41 countries.
In a recently leaked internal report prepared for its London-based parent, Imperial Tobacco Canada reveals that it’s been quietly involved for years in lobbying campaigns by convenience-store and anti-contraband groups.
The secret report describes Project M&M, a 2012 campaign intended to “mobilize local governments to pressure for big government action” against illicit tobacco, with demands for an excise tax freeze piggybacked on the main message.
Listed as partners in Project M&M are the Canadian Convenience Store Association, the National Coalition Against Contraband Tobacco, the Ontario Chamber of Commerce, Fédération des Chambres de Commerce du Québec and the Canadian Taxpayers Federation.
The leaked 32-page document includes a map identifying 10 “strategic municipalities” to be targeted in Ontario: Sault Ste. Marie, Sudbury, Windsor, Brantford, London, Mississauga, Niagara Falls, Whitby, Cornwall and Toronto.
These municipalities were selected, the report says, because of their:
- proximity to illicit tobacco
- seizure activity
- internal sales data
- political weight
- likelihood of buy-in
The document also identifies 10 targeted municipalities in Quebec: Montreal, Gatineau, Chateauguay, Laval, St. Georges, Sherbrooke, Quebec City, Drummondville, Trois Rivieres and Saguenay.
An article published one month ago by the National Post pointed to other close ties between convenience-store organizations and the tobacco industry.
“In fact, there is other evidence of their close links to the industry, including at least three former tobacco-company executives who are now leaders in the Ontario, Quebec and national convenience-store associations,” the Post’s Tom Blackwell reported.
The leaked Imperial Tobacco report suggests that the “2012 lobbying campaign was no grassroots movement, and that the retail and contraband organizations have for years been used as surrogates by the cigarette giant to promote its own interests,” Blackwell wrote.
Sales of illicit cigarettes are considered a major problem in Ontario, where a bag of 200 illegal “rollies” sells for as little as $10 to $15, compared to more than $80 for legally taxed smokes bought at a corner store.
A 2013 study of collected cigarette butts conducted by NIRIC Group for the Ontario Convenience Store Association found that 17.7 per cent of butts picked up in Sault Ste. Marie were contraband, compared to 30.1 per cent in Kitchener, 28.5 per cent in Barrie, 24.5 per cent in Sudbury, 20.9 percent in Thunder Bay, 18.7 per cent in Toronto, 18.1 per cent in Guelph and 11 per cent in North Bay.