Benefits of tobacco taxation
Morung Express Editorial
Nagaland
government raised taxation on tobacco products from 18% to 25%. This is a right
move in the right direction. But comparing to the Philippines which raised
tobacco taxes by as much as 340% and experience of other Indian States, what
the State government did was far from enough. The World Health Organization
released a document very recently called ‘The
economic and health benefits of Tobacco Taxation’ which has strong
evidences for the benefit of increasing taxation on tobacco products.
There
is evidence that increasing the price of tobacco products is one of the most
effective measures to reduce tobacco consumption. It is estimated that doubling
the price of cigarettes reduce consumption by 40%. In South Africa, average
daily consumption of cigarettes came down from 4 cigarettes per adult per day
to 2 cigarettes per day over a decade since the taxation increased from 32% to
52% from 1993 to 2009. In France, as the taxes increased, smoking prevalence
reduced, corresponding lung cancer rates fell sharply, and revenue from tobacco
taxation increased substantially.
There
is misconception that increasing the price of tobacco disproportionately affect
the young and poor people. Evidence shows that the poor are more responsive to
increase in price and this has positive impact in avoiding disease and death
due to tobacco. Since the richer users are less affected by price rise,
monetary burden of higher tobacco taxes will fall heavier on them. Example from
Canada shows that lower income groups experience greater decline in tobacco
deaths on increasing taxation. It is argued that livelihood of the poor are
affected who are employed in the tobacco industry. However, evidence shows that
the annual financial loss due to tobacco related diseases is greater. Likewise,
when tobacco price increase, young people are more likely to reduce consumption
of tobacco than older people.
Increasing
tobacco taxation does not only have direct health benefit, it is an important
source of revenue which can be leveraged to fund tobacco control activities or
other health program. At least 30 countries have earmarked tobacco tax revenue
to fund health activities. This is a good opportunity for a State like ours
where fund for healthcare is always deficient. The phenomenal 340% increase in
tobacco taxation received strong political support and 85% of the fund
generated is earmarked to the Universal Health Care Program. Dr. Margaret Chan,
Director-General of WHO said that tobacco taxation offers a ‘win-win’ situation
where extra income can be generated while reducing consumption.
More
than half of adult Nagas use tobacco in one form or the other. The WHO document
says that a 30 years lag exists between tobacco use rates and many of their
associated illnesses. So, the impact of current users is not felt yet and
unless the trend is reversed, the increasing use of tobacco will not only chock
the health services but also cripple our economy. Non Communicable diseases
like cardiovascular diseases, cancers, and chronic lung diseases are already
the leading cause of death in the world and tobacco use in one of the major
risk factors. To control tobacco use through increased taxation doesn’t cost
much. What it needs is a strong political will to pass the law. Following the Millennium
Development Goals (MDGs), the new Sustainable Development Goals (SDGs) which
will go till 2030 has identified tobacco taxation as a ‘phenomenal’
intervention in tobacco control policy. We should step up to the opportunity
and increase tobacco taxation to at least 50% as recommended by former Health
Minister Dr. Harsh Vardhan, or even higher.
Dr. Sao Tunyi works as an Epidemiologist at
Directorate of Health and Family Welfare, Kohima. Feedback can be sent to saotunni@yahoo.co.in, or visit his blog www.thatchhouse.blogspot.in
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