ITIC
The Resource Manual by ITIC is a tool for promoting vested interests rather than designed to help governments
http://www.asiantribune.com/node/88109
The Bangkok-based Southeast Asia Tobacco Control Alliance (SEACTA) warns legislators and finance ministries against replying on this Manual which is being widely promoted by ITIC to ASEAN governments.
An academic review of the Manual’s section on tobacco taxation has revealed contradictions and inconsistencies when compared against international best practices and recommendations in the Framework Convention on Tobacco Control (FCTC) of the WHO – Article 6 guidelines on tobacco tax and price measures, which 180 governments worldwide have committed to implement.
Professor Hans Ross from the University of Cape Town, who reviewed the Manual said; “On the surface, the Manual and the WHO-FCTC Article 6 guidelines seem to be aligned on some issues. However, the main principles and views that the Manual promotes often contradict its analysis and recommendations.
It also runs contrary to international best practices on tobacco taxation outlined in the Article 6 guidelines of the WHO-FCTC.
Among the main faults of the Manual are the following;
The Manual fails to acknowledge the evidence and recommendations of the WHO-FCTC Article 6 guidelines on Price and Tax Measures to reduce the demand for tobacco that states Parties unanimously adopted in 2014.
The ITIC claims Indonesia has the lowest penetration of illicit tobacco products in another document, yet this Manual claims Indonesia is an example of a country with the highest taxes in terms of affordability, which according to the Manual, drives illicit trade in Indonesia.
The Manual warns against substantial tobacco tax increases, even if some countries in the ASEAN region and many others globally have successfully increased tax to reduce tobacco use while also boosting their tax revenues.
The affordability of cigarettes is driven not only by tobacco taxes, but also by the industry-set prices which the Manual conveniently does not address.
The Manual’s very strong opposition to tobacco tax earmarking sharply contrasts with the recommendations in WHO-FCTC Article 6 guidelines.
The Manual falsely claims that the tobacco industry’s system supposedly designed to deal with illicit trade is compliant with the WHO-FCTC Protocol to Eliminate Illicit Trade in Tobacco Products.
Professor Ross added; “Its estimates of illicit trade and the associated revenue losses are based on another ITIC report funded by the tobacco industry that has been discredited due to its methodological weakness, the use of unreliable data, biased conclusions, and abundance of mistakes and errors.”
“Given the vested interests of the transnational tobacco companies that fund ITIC and provided it with data, it is obvious that the manual cannot be trusted”, Ms. Sophapan Ratnachena, the Tobacco Program Manager of SEACTA.
She added; “ A tobacco tax roadmap developed in collaboration with the tobacco industry is a dangerous proposition for both tax revenue and public health. It is important that governments protect their public health policies, including tobacco taxation, from commercial and other vested interests of the tobacco industry.”
ITIC Meets with Philippines Officials
http://www.iticnet.org/news-item/itic-meets-with-philippines-officials
On 28-29 September, ITIC President Daniel Witt and Senior Advisor Wayne Barford held a series of meetings to present the ASEAN Excise Tax Reform Manual to key stakeholders.
On 29 September, House Committee on Ways and Means Chairman Romero Quimbo chaired a roundtable at the School of Economics at the University of the Philippines. Members of the House Committee on Ways and Means and the Senate Tax Study and Research Staff attended the roundtable (pictured below).
Witt and Barford also met with Senate Committee on Ways and Means Chairman Sonny Angara and attended a Senate Plenary session, where they presented a copy of the ASEAN Excise Tax Reform Manual to Senate President Frank Drilon, among other Senators.
Following the House and Senate meetings, Witt and Barford also attended a dinner organized by the Philippine Chamber of Commerce and Industry.
ITIC Hosts Discussion with Chinese Tax Officials
On Friday, 18 September, ITIC held a roundtable discussion in Washington with a visiting delegation from the Shenzhen Local Taxation Bureau in China. Jon Talisman, Former Assistant Secretary of the Treasury for Tax Policy, spoke to the delegation about the status of tax reform in the United States. ITIC Senior Advisor Hafiz Choudhury then led a discussion on regional tax coordination and the taxation of e-commerce, both in the United States and internationally.
ITIC sponsor Goldman Sachs graciously hosted the seminar in its Capitol Hill office.
Industry-funded Report on Illicit Trade in South East Asia Lacks Credibility
RESEARCH ALERT
Late last year, the International Tax and Investment Center (ITIC) and Oxford Economics released a report on illicit trade in tobacco products in 14 countries in Asia. The report was a follow-up to their 2012 attempt to estimate the scope and composition of illicit tobacco consumption in Asia. The South East Asia Tobacco Control Alliance (SEATCA) recently assessed the quality of the new report in Failed: A Critique of the ITIC/OE Asia-14 Illicit Tobacco Indicator 2013. The SEATCA critique examines the methods and data used in ITIC report, concluding that the report lacks integrity and is biased. The problems in the ITIC report, which was funded by the multinational tobacco company Phillip Morris International, fall into four general categories: methods and data issues, lack of sufficient detail to permit assessment and replication, selective presentation of results, and mistakes and errors.
Key Findings
The SEATCA critique found numerous deficiencies in the ITIC report. Among them are:
Different sources and methods are used across countries, leading to results that are not comparable to one another, yet presented for comparison.
No rationale is given for including or excluding countries from coverage in the report.
Many of the methods used to measure illicit trade in the countries are either weak or lack enough detail to allow for a judgement about their strength.
The quality of the original data collected is questionable because it is not representative and could be intentionally biased.
Many secondary data come from sources with an obvious conflict of interest; for example, the tobacco industry.
The findings are selectively presented. The report highlights examples of increasing illicit consumption while neglecting to point out examples of declines or where there have been no changes in markets.
The report contains many errors and mistakes. For example, it fails to distinguish smoking incidence (how many people per year begin to smoke) and smoking prevalence (the proportion of the population that smokes), even though these are two very different concepts.
Key Messages
Policymakers should reject the ITIC/OE Asia-11 report because it is not an independent study, uses flawed methodology, and results in skewed findings supportive of the tobacco industry positions on taxation.
Countries should implement Article 5.3 Guidelines of the Framework Convention on Tobacco Control and reject any partnership with the tobacco industry and its representatives in tackling the illicit tobacco trade problem.
Countries should step-up enforcement to reduce illicit tobacco trade.
Countries should ratify the Protocol on Illicit Trade of Tobacco Products.
Full Citation: Southeast Asia Tobacco Control Alliance (SEATCA). Failed: A Critique of the ITIC/OE Asia-14 Illicit Tobacco Indicator 2013. Bangkok: SEATCA. June 2015.
Full text [ENGLISH ONLY] available at: http://seatca.org/dmdocuments/Asia%2014%20Critique_Final_20May2015.pdf
SEATCA is a multi-sectoral alliance established to support ASEAN countries in developing and putting in place effective tobacco control policies.
If you have questions about the report, please email author Hana Ross at hzarub1@yahoo.com or SEATCA Research Coordinator Sophapan Ratanachena at sophapan@seatca.org.