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Sunday, May 9, 2010

Raise cigarette tax now and save our future

By Akinshola Owoeye

Health practitioners and tobacco control experts have proposed to the federal government that taxes on cigarettes should be increased to discourage more smokers. The increment from a cigarette tax is twofold: raising state revenue and achieving public health policy goals such as discouraging the use of tobacco.
It is a known fact that smoking kills. Currently, it kills over 5.4 million people annually.
More than 70 per cent of these deaths occur in developing countries.
Hundreds of victims, including celebrities, youths, and the old have died of tobacco related diseases. A random survey in eleven government owned hospitals in Lagos State in 2006 threw up a shocking statistics: two people die each day from a tobacco related disease. That was four years ago. Today the number will be higher and it will assume an alarming and frightening rate if we consider the impact on the entire country.
In fact, in developed countries, cigarette companies are levied with high taxes that serve as source of revenue for their governments as a way of discouraging smoking.
Their governments collect the tax to support its operations and to influence the macroeconomic performance of the economy. In the state of New York alone, increases in tobacco taxes raise about one billion dollars as revenue every year. Just last month, the state was considering raising tobacco taxes yet again because the rate of youth smoking had gone down drastically.
The Framework Convention on Tobacco Control (FCTC), which came into force in 2005 and which has been signed and ratified by over 168 countries including Nigeria, has taxation as one of its elements. The signatories recognise that price and tax measures are effective and important means of reducing tobacco consumption in various segments of the population, particularly among the youth. The FCTC maintains that if this is achieved, it could prevent about five million deaths in a year.
In this context, I will define tax as an involuntary fee - or, more precisely, “unrequited payment” - paid by individuals or businesses to a government (central or local). Taxes on tobacco products can be regarded as sales taxes. They are generally held to discourage retail sales, since poor people spend a higher proportion of their incomes on commodities like food, cigarettes and so on.
The reason for increasing tobacco tax is not new. According to Adam Smith, in the Wealth of Nations, (1776) “sugar, rum, and tobacco are commodities which are nowhere necessaries of life, which are become objects of almost universal consumption, and which are therefore extremely proper subjects of taxation.” It has been proved beyond doubt that when the price of cigarettes goes up, the use of cigarettes comes down.
According to a Nigeria Tobacco Control Alliance (NTCA) report, youth smoking rates rose badly between 2001 and 2008 because young people could afford to buy a pack of cigarettes or the individual stick. The cost of a pack in Nigeria ranges between N120 and N180, while the same pack goes for $6 in Maine, USA, and in the United Kingdom costs seven pounds.
In Maine the price increase in 2009 went from $1.34 to $6. This has not only discouraged smoking but it has lowered the rate in the region.
Keeping prices high is an important way for governments to show they have the interest of the people at heart, because poor smokers tend to spend a higher proportion of their income on tobacco and this has compounded their health challenges.
Here in Nigeria the price of a pack of cigarettes should be increased to a minimum of N1500 and sale of single sticks should be discouraged for the same reasons. This is a matter of health, not just a tax policy. When the price is increased more people are likely to quit or to reduce consumption, which will improve health and release income for other uses. The health of the people should override every other interest, including the economy, because it is when we are alive that we can talk about economy.
Senate President, David Mark said during a public hearing on the National Tobacco Bill 2009 organised by Committee on Health: “We stand between health and economy that is the truth of the matter. People who are against it are worried about the impact on the health of Nigerians and people who are for it are saying well, the nation stands to benefit from it. The simple question is, when do you begin to worry about economy, is it when you are dead or when you are alive?”
The statement is clear enough. We should not allow the baseless arguments of tobacco companies to deceive us. Nigerians are dying daily due to tobacco addiction while tobacco manufacturers smile all the way to the bank. The tobacco tax must be increased to save lives!

Akinshola Owoeye is Project Officer, Nigeria Tabacco Control Alliance