SEATCA says higher tobacco taxes will reduce smoking
Southeast Asia Tobacco Control Alliance has said that raising taxes on tobacco products will reduce their use and help save lives. In Cambodia this means the move could help over two million smokers quit the habit and prevent 15,000 deaths a year.
It said that the current tax rate is only 25-31% of the retail price, keeping cigarettes very cheap at less than $1 per pack and making cigarettes more affordable over time.
The tobacco industry routinely exaggerates its contributions and uses biased industry-sponsored research on illicit trade to oppose tobacco tax increases and mislead policymakers and the public alike.
It is estimated about 11.6% of the global cigarette market is illicit, mostly in low and middle-income countries where cigarettes are cheap.
In fact, evidence indicates that the illicit cigarette market is larger in countries with low taxes and prices, while relatively smaller in countries with higher cigarette taxes and prices.
It added that the causes of illicit tobacco trade are complex, but several studies, including a World Bank Group global review, reveal that the primary reasons for illicit trade are non-price factors, particularly corruption, weak tax administration/customs laws and their enforcement, and the participation of tobacco companies and other criminal networks.
SEATCA noted that in Malaysia, despite the fact that there has been no tax increase for the past six years (2016 – 2021), industry-sponsored data claims the illicit trade problem has increased, a convenient scenario to persuade government to refrain from tobacco tax increases. Such tobacco industry interference in tax and other measures has undermined public health efforts in Malaysia.
“On the other hand, in neighbouring Singapore, the government has successfully kept the illicit market share very low, despite having the highest cigarette prices in the ASEAN region. It added that raising taxes will lead to decreased demand for cigarettes even when illicit products are present in the market. Tax avoidance and evasion, therefore, will not defeat the effectiveness of tax increases for public health and revenue goals,” SEATCA said.
Source: Khmer Times