SEATCA launches the world’s first ‘Tobacco Tax Index

During the tobacco taxation in ASEAN countries regional workshop held in Yangon, Myanmar last September 18 to 19, the Southeast Asia Tobacco Control Alliance (SEATCA) launched the world’s first “Tobacco Tax Index: Implementation of WHO Framework Convention on Tobacco Control (WHO-FCTC) Article 6 in ASEAN Countries“.
2 Launching of Tobacco Tax 
According to the report, countries in Southeast Asia remain lacking in effective tax policies on tobacco and the ASEAN region as a whole has moved at snail’s pace in implementing effective tobacco tax policies. Despite the global recognition that high tobacco taxes can reduce consumption and the tobacco-related disease burden while also raising government revenues, most countries do not have a long-term tobacco tax policy. 

Main findings in the report include:  Cigarettes  in ASEAN are generally affordable even to the poor and the young;

  •  Only Brunei and Singapore have uniform specific taxes, while the Philippines is expected to implement its policies by  2017;
  •  Brunei, Malaysia, and Singapore are the only ASEAN countries that tax all tobacco products (cigarettes and non-cigarette products) in a comparable manner;
  •  Most ASEAN countries require fiscal markings, such as tax stamps, but no country uses them in a tracking and tracing system.

Comparing these findings with the international guidelines, the report urges governments to:

  •  Develop and implement long-term tobacco tax policies that include public health targets
  •  Raise taxes high enough on a regular basis to reduce affordability; 
  •  Apply a uniform specific tax system or a mixed system with a minimum specific tax floor; 
  •  License all manufacturers, importers/exporters, distributors, and retailers of tobacco products and manufacturing equipment;
  •  Establish a tracking and tracing system, including fiscal markings with a unique identifier, to reduce the risk of smuggling and assist in investigations of illicit trade;
  •  Prohibit tax-free or duty-free tobacco products

“To effectively regulate the tobacco industry in line with international best practice, governments should require the tobacco industry to periodically submit detailed financial reports that include information on tobacco manufacture and sales volumes, market share, marketing expenditures and revenues, and volumes of raw material inputs,” said Ms. Sophapan Ratanachena, SEATCA’s Tobacco Tax Program Manager.

tax YangonNoting the tobacco industry’s constant interference and opposition to tobacco tax increases, SEATCA’s FCTC Program Director, Dr. Ulysses Dorotheo, added that “a code of conduct for all government officials prohibiting unnecessary interactions with the tobacco industry is essential to successfully develop and implement effective tobacco tax policies.” The Philippines is leading in this respect with the Joint Memorandum Circular No. 2010-01 issued by its Civil Service Commission (CSC) and Department of Health (DOH). 

“Reducing affordability through higher tobacco taxes is one of the most potent and cost-effective strategies to reduce tobacco use and save lives, encouraging current users to stop or reduce consumption and discouraging the youth from starting. The positive health impact is even greater when governments consider dedicating tobacco excise revenues for tobacco control in their respective countries such as in Thailand and Vietnam,” the report said.

Download the index through this link