Tobacco product tax effective in reducing cigar useACTA
Earlier this month the National Treasury Cabinet Secretary announced an intention to raise taxes on e-cigarette products during the annual budget statement presentation to Parliament. This announcement was received with excitement and condemnation in equal measure from tobacco control enthusiasts and the tobacco industry, respectively.
In recent years, innovation in the tobacco industry has led to an increased rise in the use of the e-cigarette. If the 2022/23 budget is adopted by Parliament, Treasury CS proposed to change the taxation regime for liquid nicotine from the current shillings per unit to an excise duty of Sh70 per millilitre.
The move will be made to curb the easy availability of liquid nicotine used in the devices to school-going children and the youth. This is a positive move in tobacco control, especially given that tobacco use kills approximately 9,000 Kenyans every year.
An e-cigarette, also known as e-cig, e-cigar or vape pen, is a long tube that usually resembles a cigarette, pen or pipe. e-cigs have a mouthpiece, a heating element, a rechargeable battery and electronic circuits.
The e-cig is a battery-operated device that emits doses of vaporised nicotine, or non-nicotine solutions, for the user to inhale. It aims to provide a similar sensation to inhaling tobacco smoke without the smoke. As the user sucks on the mouthpiece, a sensor activates a heating element that vapourises a flavored, liquid solution held in the mouthpiece. The person then inhales the aerosol, commonly known as vaping.
A lot of studies, including a growing number from low-income and middle-income countries, clearly demonstrate that tobacco excise taxes are a powerful tool for reducing tobacco use while at the same time providing a reliable source of government revenues.
Significant increases in tobacco taxes that increase tobacco product prices encourage current tobacco users to stop using, prevent potential users from taking up tobacco use, and reduce consumption among those that continue to use, with the greatest impact on the young and the poor.
Global experiences with tobacco taxation and tax administration have been used by WHO to develop a set of ‘best practices’ for maximising the effectiveness of tobacco taxation.
Tobacco consumption is expected to grow by 25 per cent in 2025, despite a reduction in Asia, North America, and Europe.
The monetary burden of higher tobacco taxes falls more heavily on the wealthiest users, whose tobacco use declines less, while most of the health and economic benefits from reductions in tobacco use are gained by the most disadvantaged populations, whose tobacco use declines to a larger extent when taxes increase.
Every nation and sub-national entity that has significantly increased its tobacco tax has enjoyed substantial increases in revenue, even while reducing smoking. There is considerable potential for tobacco taxation to generate much-needed financing for development and health programs, particularly in low- and middle-income countries.
Taxes on tobacco products should increase over time to continue to have the intended effect of encouraging quitting among current smokers, and preventing vulnerable populations, especially youth, from starting to use these products.
Programmes providing tobacco prevention and quitting services should receive a significant portion of funds garnered from all tobacco taxes, which will further protect communities from the toll of tobacco.