Why a higher tax on cigarettes bears more gains than protecting local cigarette manufacturers?

In 2017 parliament of Uganda amended the excise duty Act no. 11 of 2014. The Excise duty (Amendment) no. 11 of 2017 in section 2 imposes different excise rates on locally and foreign made cigarettes (soft cap and Hinge lid).
This amendment is a matter of contention in the East African Court of Justice that slapped an injunction on Uganda (Revenue Authority) on the 25th of January 2018 to stop forthwith collecting billed excise duty on British American Tobacco (U) LTD that shifted operations to Kenya.
While at Hotel Piato on the 7th of February 2018 in a CSO and members of School management committees of Schools in Kampala organised by the Uganda national Health Consumers Organisation, Hon. Isaac Mulindwa Soozi, the Lugazi Municipality Member of parliament and member of the finance committee of parliament, said that they (MPs) imposed higher excise duties on Foreign manufacturers to protect the local cigarette manufacturers.
Hon. Andrew Kaluya member of parliamentfor Kigulu County South,Iganga District, disagreed with the notion of protecting any cigarette manufactures because they both manufacture products that need strong controls among which banning the products from Uganda and availing alternative crops to farmers makes the most feasible argument. I with great pleasure acknowledge that Uganda removed Tobacco from its priority of Crops.
It must be recalled that section 23 (a) of the Tobacco Control Act no.22 of 2015, prohibits persons that contribute to or may contribute to the formulation….of public health policies on tobacco control from providing any incentive, benefits or privileges or preferential tax exemptions to the tobacco industry.
Incidentally, Tobacco manufacturers agree that tobacco use affects the lungs, causes heart diseases and kill its consumers as prescribed on their packs. A National NCD risk factor survey conducted in 2014 shows that one in every four adults in Uganda suffers from a Non-Communicable Disease.
And yet the Centre for Tobacco Control Africa (CTCA) in 2017 found that, the total health cost of tobacco use including the direct cost of treatment and the indirect costs of loss of income and productivity from death and disability in Uganda is UGX 328.82 billion, which is equivalent to US$126.48 million.
Expensive cigarettes translate to health gains
When taxes raise cigarettes prices, the poor get more health benefits than the rich. The relationship between price and income is very important. When prices increase faster than salaries, people must earn more to afford their cigarettes, which decreases cigarette consumption and increases the rate of quitting.
WHO calculates that if all countries increase taxes on cigarette packs by 50% there would be 49 million fewer smokers and this would avert 11 million deaths from smoking based on unpublished WHO simulations using the 2012 data).
The benefits of cessation are many and occur for a number of serious diseases soon after quitting. Only one year after quitting smoking, the risk of coronary heart diseases is about half that of a smoker. The stroke risk is reduced to that of non- smokers 5 to 15 years after quitting. After10 years of cessation, the risk of lung cancer fails to about half that of a smoker, and there is a decreased risk of cancer of the mouth, throat, oesophagus, bladder, cervix and pancreas according to WHO.
France, for example, increased its taxes substantially and regularly between the early 1990s and 2005, tripling its inflation-adjusted cigarette prices. This was followed by a reduction in sales by more than 50%. The health impact of this dramatic reduction in consumption was seen just a few years later with a reduction in lung cancer death rates for young men. Death rates went down by 50% during the same period. After a period of unchanged tax rates between 2005 and 2009, France has started to regularly increase tobacco taxes since 2010.
 
Raising taxes on tobacco improves economies for Government
In addition to reducing tobacco use and the associated health burden, tax increases generate substantial additional revenues to governments. Tax increases are a win-win situation because they are good for both public health and government revenues. Government revenues raised in this way can be used for health and other public benefit.
In Egypt, the government substantially increased the tobacco tax in 2010. The tax per pack for the most popular brand of cigarettes increased by 46% from 2.95 Egyptian pounds (EGP) to 4.32 EGP. This reduced sales by 14% in only two years. The impact on revenues was colossal, increasing by 151%, from 7 billion EGP to 17.6 EGP between 2010 and 2012.
Simple tax systems are
A number of countries around the world impose complex systems of tobacco excise, which are difficult to administer and subject to loopholes. The tobacco industry takes advantage of these loopholes to avoid paying the full amount of taxes. The resulting loss of revenues for the government and the difficulty to translate into price increases and reduced affordability for consumers makes these taxes and tax increases ineffective.
This reduced the tax tiers from four to two in 2013 and will bring them down to a single uniform rate in 2017. The reform also removed tax obligations which favoured one company over another. In addition, a provision was introduced to have automatic annual increases in the tax until 2017, with more rapid tax increases on lower priced brands.
Since implementing the reform in 2013, the Government reports that tobacco prices have gone up, sales have gone down and revenues have increased substantially.
In the African region, Gambia changed the base for its excise on cigarettes from weight to volume in 2012. Evidence shows that basing taxes on weight of tobacco encourages the industry to produce lighter but not less harmful cigarettes to pay less taxes.
In 2013, Gambia also raised the excise on all tobacco products to the same rate. This has the benefit of discouraging consumers from switching to a cheaper product when taxes are increased. Governments around the world tend to impose higher taxes on cigarettes than on other tobacco products, leading to price differences and encouraging substitution from higher priced products (usually cigarettes) to cheaper tobacco products such as water pipe tobacco or roll-your-own cigarettes. Taxing all products similarly leads to a harmonization of prices and reduces incentives for substitution.
Cheap cigarettes obtaining on the Ugandan market are a result of our weak tax law that makes tax administration difficult and thus making the routine tax imposing every financial year a nuisance to quitting and generating revenue so as to case a health dividend to cut health expenditure relations with tobacco caused diseases.
Talibita Moses, Is a tobacco control Activist working with Uganda National Health Consumers Organisation
mtalibita@unhco.or.ug

KCCA and Uganda Police Inspect Businesses in Kampala for compliance to The Tobacco Control Law

Tobacco Control advocate agency Uganda National Health Consumers’ Organisation (UNHCO) conducted spot on health inspections, audits and sensitization exercises of businesses and business areas in the Kampala divisions of Nakawa, Rubaga, Kawempe, Makindye and Central area to support enforcement of the Tobacco Control Act for compliance.
The Tobacco Control Act (2015) is a public health act that amply empowers all citizens of Uganda to enforce its declaration, including the total ban on shisha and the 50-metre rule. It has been completely enforceable since May 2017.
The Tobacco Control Act (2015) Section 16 places a TOTAL BAN on the importation, sell, offer for sale, or distribute of; Shisha (which is a flavoured water-pipe tobacco product) and/or shisha pots (which is a water-pipe delivery system). The penalty is a severe fine of not less than 20,000,000 UGX.
UNHCO worked with a team of government and civil society agencies including, Ministry of Health, Uganda Police Force (i.e.; CPS/Anti-Narcotics Department), Kampala City Council Authority, Ministry of Local Government, National Environment Management Authority and Uganda National Bureau of Standards.
During the inspection in the communities, traders were eager to listen closely to health and police inspectors, as they shared the details of the Tobacco Control Act.
And a way to ensure enforcement, there was a trader who was found illegally selling banned shisha products, who attempted to argue with the health and police inspectors claiming that he had legal paperwork permitting him to sell the illegal products.  On delivery of the papers, the agents from URA during the inspections proved that the forms provided were in contempt of the law. All business owners should know that SHISHA IS A BANNED TOBACCO PRODUCT.
It should be known by all business owners that SHISHA IS A BANNED TOBACCO PRODUCT in Uganda.

Prof. William Bazeyo's State of the School of Public Address highlights tremendous success

Title: Prof. William Bazeyo’s State of the School of Public Address highlights tremendous success

Mulago, Kampala- August 30, 2017

 

The outgoing dean of Makerere University School of Public Health (MakSPH), Prof. William Bazeyo has called for the transition of the School into a College, adding that the School has all the requirements to become one. Prof. Bazeyo was this afternoon delivering the state of the School address to a highly packed and attentive audience of students, staff and partners of MakSPH at the Davis Lecture Theatre in Mulago.

Source: Prof. William Bazeyo’s State of the School of Public Address highlights tremendous success

'We are scared we will die soon', Tobacco Workers.

Folarin Jakanola died from a sickness he developed from the working environment he was exposed to while working with British-American Tobacco, Nigeria. “We were exposed to the same environment and we are going through serious health problems. We are scared we will die soon.”
“We were exposed to the same environment and we are going through serious health problems. We are scared we will die soon.”
Listen in to the below podcast for more information.

CTFK Statement: U.S. Authorities Urged to Investigate British American Tobacco for Allegations of Widespread Bribery and Corruption in Africa

Following new allegations about the conduct of British American Tobacco (BAT) in Africa –published today by The Guardian – the Campaign for Tobacco-Free Kids (CTFK) urged the U.S. Department of Justice and the U.S. Securities and Exchange Commission to investigate BAT and its subsidiaries for possible violations of the anti-bribery and accounting provisions of the Foreign Corrupt Practices Act (FCPA). Tobacco-Free Kids requested the investigation in a letter to the two government agencies.
British American Tobacco has faced mounting allegations that the company engaged in widespread bribery and corruption in Africa to gain an advantage over competitors and stifle government efforts to curb smoking.
Earlier this month, the U.K. Serious Fraud Office (SFO) formally launched an investigation of BAT on suspicions of corruption. An investigative report published today by The Guardian revealed new allegations that, for years, BAT secretly and possibly illegally moved millions of U.S. dollars in cash across international borders into the war-torn Democratic Republic of Congo (DRC) allegedly to support the company’s tobacco leaf operations in that country.
The new allegations indicate BAT’s operations included engaging with armed rebels involved in the long-standing DRC conflict in order to make secret cash drops used to pay for tobacco leaf from farmers in Auzi, an unmapped town BAT built in the 1950’s, according to The Guardian.
In addition to possible violations of the FCPA, The Guardian report raises questions about whether BAT’s conduct in moving U.S. dollars during the DRC conflict also violates federal anti-money laundering laws, especially as the U.S. has had sanctions in place against the DRC since 2006. The story also exposes BAT’s role in flooding South Sudan with its cheapest cigarette brands following years of war and operating around terrorist networks in Somalia to continue selling cigarettes in the country.
The growing allegations about BAT’s conduct are particularly alarming following the July 2017 merger of BAT and Reynolds American in the United States. The recent merger places BAT in a leading position in the U.S. market and, according to BAT, created the largest tobacco company in the world by operating profits.
“Given British American Tobacco’s decades-long history of calculated deception in the United States and abroad and its re-entry into the U.S. market, the mounting allegations of corruption and mass concealment of funds by BAT must be fully investigated by U.S. regulators for possible violations of the Foreign Corrupt Practices Act and any other applicable criminal or civil laws,” said Matthew L. Myers, President of the Campaign for Tobacco-Free Kids. “This is a company that has proven it cannot and will not play by the rules. Unless and until they are held accountable by governments, shareholders, business partners and the public, the company’s wrongdoing will only continue.”
Alleged corruption within BAT was first publicly exposed in November 2015 when the BBC, and later other news outlets, revealed allegations that the company was engaging in bribery and other corrupt acts that included bribing Ministry of Health officials in Burundi, Comoros and Rwanda, a former Kenyan Minister of Justice and a Member of Parliament from Uganda.
Tobacco use kills more than seven million people worldwide each year. Without urgent action by governments to pass proven tobacco control laws and curb the power and influence of tobacco companies, tobacco use will kill one billion people this century.

17th World Conference on Tobacco or Health: Scholarships and free registrations

Title: 17th World Conference on Tobacco or Health: Scholarships and free registrations

 

The 17th World Conference on Tobacco or Health (WCTOH) is able to offer a number of free registrations to community volunteers or individuals affected by lung disease. Individuals from low- and middle-income countries will be given priority, as will those who are presenting at the conference, including those presenting in the community space.
The deadline for applications is 4 August 2017. Find out more details and apply online
Source: 17th World Conference on Tobacco or Health: Scholarships and free registrations

Multi-million pounds backing for scientists to tackle tobacco-related harm in Asia and Africa

Title: Multi-million pounds backing for scientists to tackle tobacco-related harm in Asia and Africa







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A team of researchers, led by the University of Stirling, has been awarded £3.4 million from the Global Challenges Research Fund (GCRF) Research Councils UK Collective Fund to reduce tobacco-related harm in low and middle-income countries in Asia and Africa.

Read MORE


Source: Multi-million pounds backing for scientists to tackle tobacco-related harm in Asia and Africa

Tobacco Control Regional Media Training

The Uganda Health Communication Alliance (UHCA) is a professional organisation that brings together journalists and other communication professionals from non-government organisations, government and academia.
UHCA is also a Tobacco Control Advocate organisation that uses its influence with the media to promote, inform and guide journalists on how to broadcast and report about the Tobacco Control activities in Uganda.
This week, UHCA is travelling the country talking to media practitioners about the need to report about the implement the Tobacco Control Law.  Below in images are the session;

The above images are during the media training in Western Uganda on the Tobacco Control Act, dangers of tobacco use, Tobacco Industry tactics and emphasizing compliance.  In this region UHCA covered districts of Fortportal, Kibito, Kyenjojo, Kyegegwa and Kasese.
The picture below also from South western Uganda in the districts of Bushenyi, Ntungamo, and Mbarara, also  had the same focus as the one above.

We will be sharing more about these regional Tobacco Control media training in our next update.

Capacity Building for Tobacco Cessation to Improve Tuberculosis Treatment Outcomes in Uganda

Title: Capacity Building for Tobacco Cessation to Improve Tuberculosis Treatment Outcomes in Uganda

A competent needs-based health workforce, aligned to local priorities is essential to addressing the increasing Non-Communicable Diseases in low and middle-income countries (LMICs) such as Uganda. Makerere University School of Public Health (MakSPH) and the Centre for Tobacco Control in Africa (CTCA), pioneer a training for health professionals on integrating tobacco cessation services into TB services in Kampala, Uganda. The training is premised on a research Project on Integrating Tobacco cessation into TB Programs using mHealth Solutions funded by National Institutes of Health (NIH) and United States Agency for International Development (USAID).


Source: Capacity Building for Tobacco Cessation to Improve Tuberculosis Treatment Outcomes in Uganda

Tobacco Activists back prosecution of cigarette dealers

Activities have tasked government to prosecute cigarette dealers, who do not comply with the tobacco law.
The law came into force last week, after the Constitutional Court blocked a move by the British American Tobacco (BAT) to temporarily halt government’s implementation of the Tobacco Control Act 2015.
Speaking to journalists during a press conference in Kampala, Dr. Sheila Ndyanabangi, the national tobacco control focal person in the health ministry also warned the Police against soliciting bribes from cigarette dealers, saying they also risk prosecution.
“If Police connives with those people and refuse to arraign them in court, they will also face prosecution because they would be derailing the law,” she said.
She said Government spends over sh1.8b in treating tobacco- related diseases every year.
“The cost of treating a patient with tobacco-related cancer is at a minimum of sh6m, as the cost of chemotherapy for six cycles which can escalate in the event that it recurs even to the second consumer,” Ndyanabangi said.
Source: New Vision Uganda.