Govt finance execs urged to boycott Asian tax forum with tobacco industry sponsors, 5 May 2015

The online news portal of TV5

BANGKOK – Government finance and tax experts from the region are attending the Asia-Pacific Tax Forum that opens in New Delhi today, amid concern that the forum’s main organizer received sponsorships from Big Tobacco.

The Southeast Asia Tobacco Control Alliance (SEATCA) issued a word of caution to governments in the ASEAN region, particularly departments of Finance and Customs attending the Asia-Pacific Tax Forum.
The May 5-7 meeting drew flak after the organizers, the International Tax and Investment Center (ITIC) received sponsorships from, among others, big tobacco companies (Philip Morris International, British American Tobacco, Japan Robacco International and Imperial Tobacco Group). Moreover, SEATCA noted, tobacco executives from these companies sit on ITIC’s Board of Directors. This, it added, poses a problem to participants from countries that are Parties to the tobacco treaty, the WHO Framework Convention on Tobacco Control (FCTC).

The FCTC in Article 5.3 warns governments to protect their public policies from any vested interest of the tobacco industry. To be compliant with FCTC Article 5.3, the Indian Minister of Finance, whom ITIC listed as the Chief Guest of the Asia-Pacific Tax Forum, is not attending the event. His name has been removed from the event website and the program agenda.

The World Bank has also announced withdrawal of its participation and financial support for the event. 

The World Bank’s decision affirms the concerns around ITIC’s intentions and sets a positive precedent, said SEATCA. It also strengthens the ongoing global efforts to require greater transparency and distancing by international and intergovernmental agencies from tobacco interests.

According to information in the ITIC website, it has confirmed participation from six ASEAN countries – Cambodia, Indonesia, Malaysia, Myanmar, the Philippines and Thailand.

All countries in the ASEAN region, with the exception of Indonesia, are parties to the WHO FCTC and obligated to enforce the treaty.

Philippines government officials are bound by the DOH-CSC Joint Memorandum Circular 2010-01 that prohibits civil servants, including all legislative staff, from interacting with the tobacco industry except to the extent necessary for its effective regulation, supervision, or control, said SEATCA.

In 2012 the ITIC, through its president, Daniel Witt, had been aligned with the tobacco industry in opposing the sin tax reform bills that were being supported by the DOF and DOH. The Philippines nonetheless enacted these bills and has successfully implemented the sin tax reform.

ITIC a ‘pro-tobacco’ entity

“While the ITIC claims to be an independent, non-profit organization, it is in fact a pro-tobacco entity that does the bidding for the tobacco industry,” pointed out Dr. Ulysses Dorotheo, FCTC Programme Director of SEATCA. “Countries are better off not attending this event and making themselves vulnerable and running foul of the FCTC.”

The Tax Forum will discuss Goods and Services Tax (GST). GST came into force in Malaysia just last  April 1, 2015. About two weeks after the GST went into effect, BAT Malaysia declared they were reverting to pre-GST prices for their main cigarette brands.

BAT controls 60 percent of the cigarette market in Malaysia. This means a reduction in cigarette prices and more affordable cigarettes for Malaysians. This move undermines the efforts of the Malaysian Ministry of Health to discourage smoking and raise taxes as a tobacco control measure in compliance with the FCTC.

The ITIC has discouraged the Malaysian government from increasing excise tax on tobacco claiming big tax increases will fuel smuggling, said SEATCA.

The ITIC, meanwhile has released a study on tobacco smuggling in Asia – a study described by SEATCA as containing more myths than facts, because its findings echo tobacco industry positions on tobacco tax. For SEATCA’s critique of the report, CLICK HERE.