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 email@example.com, or visit his blog www.thatchhouse.blogspot.in