ITIC

Finance ministry may be urged to shun meet funded by tobacco companies

May 1st, 2015

http://timesofindia.indiatimes.com/india/Finance-ministry-may-be-urged-to-shun-meet-funded-by-tobacco-companies/articleshow/47116442.cms

NEW DELHI: Faced with opposition from public health activists, the health ministry is set to intervene and may soon urge the finance ministry to distance itself from an upcoming international conference in New Delhi, being co-organised by a consortium funded by several transnational tobacco companies.

The event – The 12th Annual Asia Pacific Tax Forum – is being organised by Indian Council for Research on International Economic Relations (ICRIER) and International Tax and Investment Centre (ITIC). The event website highlights that confirmed participants include revenue secretary Shakti Kant Das, Central Board of Direct Taxes chairperson Anita Kapur and Central Board of Excise and Customs chairman Kaushal Srivasatava.

However, health activists, advocating tobacco control measures, have raised concerns over participation of government officials in an event sponsored by tobacco firms. The list of sponsors on the ITIC website includes four tobacco companies – Philip Morris International, Imperial Tobacco Ltd, British American Tobacco and JT International that was formerly Japanese Tobacco.

Institute of Public Health has pointed out that the participation of the government officials in the tax forum co-organized by ITIC would amount to violation of the WHO Framework Convention on Tobacco Control (FCTC), to which India is a signatory, which acknowledges the influence of tobacco industry and its allies in tobacco control policymaking.

Article 5.3 of FCTC states, “In setting and implementing their public health policies with respect to tobacco control, Parties shall act to protect these policies from commercial and other vested interests of the tobacco industry in accordance with national law.”

Health ministry officials also approve of the concern. “It is true that participation of government officials in such an event would amount to violation of FCTC. India is a signatory to the framework and we must respect it. Since health ministry is the nodal agency and our stand on tobacco is clear, we are considering writing to finance ministry asking them to keep away from participating in any such event,” the official told ToI.

The event’s website till Wednesday also mentioned Jayant Sinha, minister of state for finance, among the guests. However, Sinha’s name was taken off on Thursday.

Meanwhile, IPH has also approached the Delhi High Court seeking directions for the government to refrain from taking any decision or action with regard to the participation of the representatives at the tax event, scheduled to be held from May 5 to 7 in New Delhi.

The development is significant in wake of the several anti-tobacco measures and policy decisions pending in India- the latest being implementation of larger pictorial warnings on packets of tobacco products. The move has been deferred by the government pending a final report by a Parliamentary sub-committee.

MoS, bureaucrats on guest list of tax meet funded by tobacco giants

Apr 29th, 2015

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http://indianexpress.com/article/india/india-others/mos-bureaucrats-on-guest-list-of-tax-meet-funded-by-tobacco-giants/

After courting controversy over its decision to stay implementation of 85 per cent pictorial warnings on packets of tobacco products, the NDA government has once more run afoul of health activists over a tax conference that is being co-organised by a consortium funded by several transnational tobacco companies.

The 12th Annual Asia Pacific Tax Forum, which will be held in Delhi from May 5-7, is being organised by Indian Council for Research on International Economic Relations (ICRIER) and International Tax and Investment Centre (ITIC). Among those participating in the event, according to the event website, are MoS (Finance) Jayant Sinha,revenue secretary Shakti Kant Das, Central Board of Direct Taxes chairperson Anita Kapur and Central Board of Excise and Customs chairman Kaushal Srivasatava. The list of sponsors on the ITIC website includes four tobacco companies – Philip Morris International, Imperial Tobacco Ltd, British American Tobacco and JTI Group that was formerly Japanese Tobacco.

While Jayant Sinha was not available for comments, his office said that he will not attend the conference. “I have his schedule with me. I don’t think he is attending it. We never confirmed this,” said an aide. The website though prominently displays his name as one of the confirmed participants in the event.

Health experts and activists are crying foul over the participation of government functionaries in an event partially sponsored by tobacco companies. In a letter to Finance Minister Arun Jaitley on April 8, Bangalore-based Institute of Public Health pointed out that the meeting is violative of the WHO Framework Convention on Tobacco Control.

“ITIC’s sponsors include all of the leading transnational tobacco companies and its Board of Directors includes representatives from Philip Morris International, British American Tobacco, Imperial Tobacco and JTI Group. In addition, ITIC materials that are publicly available and internal tobacco industry documents made public through US-based litigation settlements show ITIC as part of the tobacco industry has worked for more than two decades to undermine tobacco control policies around the world…,” wrote IPH assistant director Upendra Bhojani in the letter whose copies were sent to Health Minister J P Nadda, Jayant Sinha and other officials named in the agenda for the event.

The WHO Framework Convention on Tobacco Control (FCTC) states: “In setting and implementing their public health policies with respect to tobacco control, parties shall act to protect these policies from commercial and other vested interests of the tobacco industry in accordance with national law”.

Referring to this section of the FCTC, the letter reminds the government that the FCTC secretariat has already sent out a note verbale to all parties, including India, highlighting the link between ITIC and the tobacco industry.

“ITIC claims to secure its members including tobacco companies a seat at the policy-making table, thwarting tobacco control measures. Any Government of India engagement with them would be allowing conflicting interests to influence its primary duty to protect its own citizens from tobacco’s harm. It also contravenes India’s obligations under the international tobacco control treaty which requires rejection of such unholy alliances”, said Shoba John Programme Director, Health Bridge and Former Chair, Framework Convention Alliance.

In an email response to queries from The Indian Express, ITIC refuted the charge that the tax forum is a violation of FCTC. “The International Tax and Investment Center (ITIC) is pleased to have the participation of a broad range of Indian government officials in the 12th Annual Asia-Pacific Tax Forum for a professional discussion of technical tax issues. It is impossible for this Forum to be even remotely considered a violation of the FCTC, since there are no tobacco-related issues on the agenda, which is purely focused on technical tax matters…” wrote Daniel Witt, president, ITIC, who is based in Washington DC.

International Conference on the Shadow Economy and Taxation

Apr 24th, 2015

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Tobacco industry peddling overestimates of illicit cigarettes to dampen tax increase

Mar 4th, 2015

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We refer to the article, “Did the tobacco industry inflate estimates of illicit cigarette consumption in Asia? An empirical analysis” Chen J, et al. published in Tobacco Control on November 25, 2014 (Tob Control 2015;0:1-7) and concur with the important points raised in this article. While the article focuses on Hong Kong, other countries in South East Asia also faced a similar experience. The authors revealed that the tobacco industry-funded study on the illicit trade of cigarettes in Asia, “Asia-11 Illicit Tobacco Indicator 2012″ by the International Tax and Investment Center (ITIC) and Oxford Economics (OE) inflated the extent of illicit consumption in Hong Kong by 133-337 percent. Similarly, other scholars have also questioned the methodology applied in this report. For example, Dr. Frank Chaloupka, Distinguished Professor of Economics at the University of Illinois at Chicago, criticized the reliability of the study’s estimates in using an inconsistent approach and the lack of details about the empty pack surveys, the main source of data for the estimates. In June 2014, the South East Asia Tobacco Control Alliance (SEATCA) released a critique of the “Asia-11 Illicit Tobacco Indicator 2012″ showing how its estimates are being used to rescind tobacco tax policies. As illustrated in Hong Kong’s experience, the SEATCA critique revealed that the ITIC-OE report overestimated the total illegal consumption in other countries in South East Asia. In the case of Vietnam, it claimed that in 2012 about 103.3 billion cigarettes consumed in Vietnam were illegal, which amounted to 19.4% of total cigarette consumption. The estimate was based primarily on the data of a tobacco industry group, the Vietnam Tobacco Association (VTA), and the full details of the methodology were not disclosed. The report admitted that data were collected only in urban areas, but it failed to mention that 68.3% of the Vietnamese population live in rural areas. This means that the findings are not representative of the Vietnamese population and are very likely biased since illicit cigarettes consumption is concentrated in big cities and near borders.

Unfortunately, as in Hong Kong, the glossy ITIC-OE study took its toll on tobacco tax policy in Vietnam. The Government of Vietnam considered the results of the study and opted for a less than ambitious tobacco tax rate increase. When the Ministry of Finance proposed a rather moderate tobacco tax roadmap in March 2014 (an increase from 65% to 75% in July 2015 and to 85% in January 2018), they noted that their decision was influenced by the illicit cigarette issue. The scope of illicit cigarettes consumption and the associated government revenue loss continued to be highlighted both in the press and during the policy debates until November 2014, when the National Assembly adopted an even weaker excise tax law: an increase to 70% in Jan 2016, and to 75% in 2019. Since these taxes are based on ex-factory price, and the tobacco industry is in full control of that price, the full impact on cigarette retail prices and tax revenue is likely to be minuscule. The average real retail cigarettes prices are expected to increase by less than 1% per year in the period from 2015 to 2020 (5.8% in 6 years), which, given the 5-6% annually per capita real income grows, is insufficient to prevent cigarette consumption from rising. In summary, the Asia-Illicit Tobacco Indicator 2012 report was as non- transparent in Hong Kong as it was in Vietnam and nine other countries covered by the report. It was used to undermine a pro-health tobacco tax policy supported both by public health advocates as well as the general public. We thank Tobacco Control for publishing the findings of Hong Kong colleagues, which successfully challenged the invalid evidence and arguments supported by the tobacco industry. We hope that other countries in Asia and elsewhere will follow Hong Kong’s initiative and expose the tobacco industry’s tactic to undermine pro-health tobacco tax policies that signatories to the WHO FCTC are committed to under Article 6 of the Convention.
Thank you
Sincerely, Son Dao , Hana Ross and Sophapan Ratanachena