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ITIC in Asia

ITIC And Its Activities

The International Tax and Investment Center (ITIC), a Washington D.C. based think tank that claims to be an independent, non-profit research and educational organization has Board of Directors from four transnational tobacco companies (BAT, PMI, JTI & ITL) which are also included in its list of funders.

In 2012, ITIC and Oxford Economics (OE) released a report on illicit tobacco trade, “Asia-11 Illicit Tobacco Indicator 2012” to provide evidences of illicit trade of tobacco products of 11 countries in Asia. ITIC later launched another report, “Asia-14 Illicit Tobacco Indicator 2013”, expanding the review to 14 countries in Asia. Recently, ITIC released “ASEAN Excise Tax Reform: A Resource Manual” as a tool for governments in Asia to implement tax policy including tobacco taxation policy. The reports and manual have been promoted and distributed throughout Asia, particularly to Ministries of Finance and Customs Departments.

ITIC and OE’s reports on illicit trade were funded by Philip Morris International and prepared according to Agreed terms of reference provided by Philip Morris Asia Ltd.

It aims to undermine in the WHO Framework Convention on Tobacco Control (FCTC) Article 6 on tobacco tax and price measures, which 180 governments worldwide have committed to implement.

In 2014, the ITIC organized a briefing for governments attending the COP6 session in Moscow hoping to influence them about their decision in adopting FCTC Article 6 guidelines on tax. The FCTC Convention Secretariat was able to warn governments just in time about this meeting.

ITIC’s 13th Asia-Pacific Tax Forum

The ITIC is holding its 13th Annual Asia-Pacific Tax Forum in Jakarta, on 23-25 May 2016. It has routinely invited government officials, especially from Finance and Customs departments, to attend its meetings. On its website and publications, the ITIC promotes photos of its executives posing with officials from Asia to illustrate its close association with Asian governments.

SEATCA’s Critiques To Counter ITIC’s Reports

1. ITIC’s Asia-11 Illicit Tobacco Indicator 2012: More Myth than Fact provides an expert review of the methodology of the Asia-11 report (which relies on litter surveys), questioning its reliability and accuracy of the estimates of illicit consumption.

2. A Critique of the ITIC/OE Asia-14 Illicit Tobacco Indicator 2013 points out that the Asia-14 report fails to provide scientifically sound and unbiased information to policy makers. The figures and statistics it reports are products of either incorrect or unverified/unverifiable estimation methods applied to often questionable data from multiple sources that do not blend.

3. Undermining Global Best Practice in Tobacco Taxation in the ASEAN Region: Review of the ITIC’s ASEAN Excise Tax Reform: A Resource Manual showed how the main principles and views that the Manual promotes often contradict its analysis and recommendations. The Manual warns against substantial tobacco tax increases, although some countries in the ASEAN region have successfully increased tax to reduce tobacco use while also boosting their tax revenues. It runs contrary to international best practices on tobacco taxation outlined in the Article 6 Guidelines of the WHO FCTC.

FCTC Convention Secretariat Action: Notes Verbale

The FCTC Convention Secretariat (FCS) refers to the ITIC as an organization that works to further the interest of the tobacco industry, having four international tobacco companies on its Board. The FCS has issued two Notes Verbale on Non-Engagement with ITIC to Parties to the WHO-FCTC. These Notes advise Parties not to engage with the ITIC as it works to promote the tobacco industry, and any engagement with ITIC will be damaging to our tobacco control efforts:

1. 4 March 2016: Note Verbale on tobacco industry interference on the tracking and tracing systems (including reference to regional meetings organized by ITIC)
2. 19 September 2014 Note Verbale on issues related to Article 5.3 and its guidelines (covering the pre-COP6 meeting organized by ITIC)

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