Unfairtobacco.org Statement on ITIC in Support of SEATCA

Statement on ITIC in Support of SEATCA

Currently, the International Tax and Investment Center (ITIC) is holding its 13th Annual Asia-Pacific Tax Forum in Jakarta, Indonesia. Civil society organisations working in the area of tobacco control have shown since years the close links between ITIC and the tobacco industry. Now ITIC employed a lawyer to intimidate the reputable Southeast Asia Tobacco Control Alliance SEATCA with a letter full of false accusations and misinformation.

Campaign against tobacco control organisation

The Southeast Asia Tobacco Control Alliance SEATCA has a long history of closely monitoring the tobacco industry and also the International Tax and Investment Center ITIC.

Lately, in October 2015, SEATCA reviewed ITIC’s ASEAN Excise Tax Reform Manual, which has been heavily promoted among government officials. The review critisized particularly the chapter on tobacco which shows inherent contradictions and an apparent negligence of international best practices on tobacco taxation.

Last month, SEATCA received a letter from Dr. Gary Johns on behalf of ITIC, accusing them of disseminating false information and lacking transparency.

Interestingly, he uses Germany1 as an example, suggesting that Germany would assess the work of ITIC as not violating Article 5.3 of the WHO Framework Convention on Tobacco Control (WHO FCTC). But there is no trace of Germany taking any official position vis-à-vis the ITIC and its lobbying.

Nevertheless, Germany is not a tobacco control champion at all – it is the biggest exporter of cigarettes in the world and at the bottom of the European tobacco control scale. The country lacks advertising bans and hasn’t substantially increased tobacco taxes for years – showing its negligence of one of the most effective tobacco control measures. So, Germany cannot be drawn upon as an exemple of effective implementation of the WHO FCTC.

Two examples of ITIC’s interference

When in November 2014 delegates of the FCTC Parties met in Moscow for the Conference of the Parties (COP), they were about to adopt guidelines for the FCTC article 6 on tax and price measures. A day before the meeting kicked off, ITIC hosted a private briefing to “ensure there is a balanced approach to important excise taxation issues“ and invited tax officials of the COP delegations. In response, the FCTC secretariat issued a note verbale to remind FCTC Parties about their commitments made under FCTC article 5.3.2 Finally, the guidelines on Article 6 were adopted as proposed – despite the ITIC intervention.

In May 2015, amidst political debates about stronger tobacco control measures in India, ITIC co-organized the Asia Pacifc Tax Forum in New Delhi. The World Bank initially was set to sponsor the event and to participate. As the chief guest to the opening ceremony the Indian Minister of State for Finance was listed as were key government tax officials. After public health experts raised their concern about the tobacco funding of ITIC, the World Bank as well as the Minister withdrew their participation and financial support.

What is the ITIC?

The International Tax and Investment Center (ITIC) describes itself as an independent clearinghouse for best practices in taxation and investment policy that facilitates “a ‘neutral table’ engagement“3 with the public, private and academic sector.

ITIC’s main sponsors are large multinational corporations from the oil, alcohol and tobacco industries, including representatives from all leading transnational tobacco companies4 on its Board of Directors. Internal tobacco industry documents5 disclose its role in facilitating the tobacco industry’s access to government officials.

In November 2014, the Director General of the World Health Organisation, Dr. Margaret Chan, stated in her address to the COP of the FCTC in Moscow about the International Tax and Investment Center (ITIC):

„Please, do not be fooled by them6. Their agenda, at least, is easy to see: to undermine your power, your efforts to adopt the robust, expert-driven proposed guidelines on tobacco tax and price policy.“

Tobacco tax is a health policy

Tobacco taxation is not just another tax burden to consumers, nor is it just another revenue for governments. Tobacco taxation is a health policy. Scientific research published in 2012 comes to the conclusion:

„Significant increases in tobacco taxes are a highly effective tobacco control strategy and lead to significant improvements in public health.“

Thus, tobacco taxation is a tool for preventing premature deaths from tobacco use. Consequently, the 180 parties, that have embraced the WHO Framework Convention on Tobacco Control (FCTC), have committed themselves to use tax and price measures to achieve their principle aim: „to protect present and future generations from the devastating health, social, environmental and economic consequences of tobacco consumption and exposure to tobacco smoke“.

Health policies such as tobacco taxation must be protected from the vested interests of the tobacco industry. Four tobacco multinationals are sitting on the ITIC board of directors. How can ITIC claim to have no vested interests?