Governments should raise taxes to achieve public health goals

Tobacco use and exposure to tobacco smoke kills smokers and non-smokers. Most tobacco users start using and become addicted to tobacco before the age of 20 when they are too young to realize the risks of tobacco use. Among tobacco users who understand the risks of tobacco, a majority report wanting to quit however the addictive nature of tobacco makes this difficult. High tobacco taxes and prices encourage tobacco users to quit and save lives. Numerous studies and experience of many countries have demonstrated that higher taxes reduce the number of tobacco users and the number of tobacco-related diseases and deaths. Higher prices encourage cessation among current tobacco users, prevent initiation, and stop re-initiation by ex-users. Higher prices also reduce the number of cigarettes smoked per day among continuing smokers. Increasing tobacco taxes to achieve a 10% increase in tobacco prices will decrease tobacco consumption by 4% in high-income countries and by about 8% in low- and middle-income countries. Tax increases that raise the real cigarette prices by 10% worldwide would result in 40 million smokers quitting and prevent 10 million tobacco-related deaths. Higher tobacco taxes also raise government revenues and cover the health care and environmental costs of tobacco use, which in many countries far outweigh tobacco tax revenues.
Government is committed to reduce tobacco consumption. The Honorable Prime Minister Sheikh Hasina pledged her government to work towards full compliance with the WHO FCTC and stated that overhauling tobacco tax is high on the agenda as the most powerful measure for reducing tobacco use. “Bangladesh will be tobacco-free by 2040”- she declared at the first-ever South Asian Speakers’ Summit on Achieving the Sustainable Development Goals, held in Dhaka. Bangladesh was the first developing country to sign the WHO Framework Convention on Tobacco Control (WHO FCTC) in 2003. Under Article 6 of the FCTC, Parties are encouraged to adopt taxation and pricing measures in order to reduce tobacco consumption.
Tobacco taxes are the single most cost-effective policy tool to achieve the goal of reducing tobacco consumption. Small tax increases are often not effective in reducing consumption, as they have limited effect on tobacco prices and thus on the affordability of tobacco products for consumers. In many countries, tobacco prices remain very low, and significant increases in price are needed to make tobacco less affordability, reduce use and save lives. Tobacco products prices in Bangladesh are very low. Excise taxes on cigarettes and bidis are well below the recommended percentage of at least 70% excise tax of the retail price set out by the WHO.
To achieve the public health goals of tobacco taxation, as called for in Article 6 of the WHO FCTC, governments should establish clear policies for raising taxes and prices to discourage tobacco use and mitigate its consequences. Tax increases that are sustained over time result in larger sustained reductions in tobacco use than temporary tax increases. In a 1999 report, the World Bank recommended that governments should raise total taxes so they account for between two thirds and four fifths of total retail price, “using as ayardstick the rates adopted by countries with comprehensive tobacco control policies where consumption has fallen”. It has been estimated that globally, one third of manufactured cigarettes were being taken illegally into countries and sold. This makes cigarettes available at a low cost thereby increasing consumption. Very recently Cigarette Manufacturers Association (BCMA) attended in the pre-budget meeting at National Board of Revenue (NBR) and proposed to decrease tobacco tax. They also mentioned cigarette is golden goods rather than illegal goods.
Finally, because there is considerable public support for tobacco tax increases that can generate funds to support health and social services that assist tobacco users to quit, tobacco price and tax increases also represent a political win.

The author Head, Health Sector
Dhaka Ahsania Mission

Source : factsheet: The Campaign For Tobacco-Free Kids, FCA, WHO


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