SEATCA-SITT Research Workshop, Vientiane, Lao PDR

SEA countries join hands in conducting research on the Affordability of Tobacco and Modeling the Impact of Tobacco Tax Increases 

 SEATCA held its first regional research workshop under the Southeast Asia Initiative for Tobacco Tax (SITT) in Vientiane, Lao PDR from 28-30 April 2010. Research teams and country partners from Cambodia, Indonesia, Lao PDR, Philippines, and Vietnam came together to strengthen evidence for more effective tobacco tax systems in their respective countries and to work toward a sustainable increase in tobacco taxes.

To facilitate this workshop, Dr. Hana Ross and Mr. Evan Blecher, both specialists in the economics of tobacco from the American Cancer Society, engaged country teams in re-examining tobacco tax, with a focus on two topics: the affordability of tobacco and modeling the impact of tobacco tax increases. Additionally Prof. Prakit Vathesatogkit (Secretary-General,  Action on Smoking and Health, Thailand) and Dr. Chonlathan Visaruthvong (Technical officer,  Department of Excise Tax, Ministry of Finance, Thailand) shared Thailand’s experience in implementing its own tobacco tax initiatives, their achievements from these initiatives, lessons learned, and challenges that had to be overcome.

The research workshop highlighted the significance of affordability of tobacco products as a good measure when looking at trends in income relative to the buying behavior of tobacco consumers, with evidence showing that people change their behavior due to price and income changes. Tobacco consumption can be curbed by tax increase and price measures, considered one of the most effective tobacco control interventions. However, curbing tobacco usage requires a strategic approach in managing and controlling various issues that occur alongside tax increases, like smuggling and increase in usage amongst women and children. Past research also shows that cigarettes have become less affordable in high-income countries and more affordable in low-to-middle-income countries. One explanation for more affordable cigarettes is the growing incomes and a decrease in the real prices of tobacco products. It is therefore recommended that policy makers in Southeast Asia focus more on affordability-based policy prescriptions and less on real prices of tobacco products.

Turning to the impact of taxes, research has shown that effectively taxing tobacco and tobacco products reduces the number of cigarettes consumed by smokers and also reduces prevalence and death rates by encouraging smokers to quit and discouraging initiation of tobacco use. From a fiscal standpoint, this translates into economic savings from lesser tobacco-related health and productivity costs, in addition to the positive impact of bigger tax collections.  This therefore results in a “win-win” situation for governments.