Presentations in 2012
Economics of tobacco taxation - excise tax implementation, arguments and facts
Location: WHO FCTC Conference of Parties, Seoul, South KoreaDate: November 2012
The presentation discusses global excise tax implementation, arguments and facts. A detailed argument is made about the relationship between higher taxes on tobacco products and the risks of illicit trade, tobacco farmers’ livelihood and industry consolidation by providing evidence and events from a number of countries.
Illicit trade and tobacco taxation
For Philippines Department of Finance Date: 6 August 2012
This presentation was prepared to inform and support the Department of Finance during the lead-up to Senate hearings on the passage of cigarette tax legislation in the Philippines. The presentation shows that although differences in cigarette prices can be an incentive for illicit trade, other non-tax factors can be of equal or greater importance.
It also highlights that many countries around the world are increasing tax rates on cigarettes and earning higher tax revenues despite the presence or threat of illicit trade. In addition, an increasing number of countries are protecting their tax revenues by introducing measures to control illicit activities and monitor production.
Regional Seminar: Tobacco prices and taxes, and Illicit trade of tobacco products: The mandates of the WHO Framework Convention on Tobacco Control
Location: Panama CityDate: 10-12 July 2012
The seminar was organized jointly by the Governments of Panama and Brazil, WHO/PAHO, and with the collaboration of the CIAT (Inter-American Center of Tax Administrations). The objective of the seminar was to facilitate cooperation between tax administrators and Ministry of Health officials in relation to Article 6 (Price and tax measures to reduce the demand for tobacco) and Article 15 (Illicit trade in tobacco products) of the WHO Framework Convention on Tobacco Control (WHO FCTC).
Participants included two governmental officials from each of the 29 Parties to the WHO FCTC in the Americas, one representative from the National Tax Administration Agency, and one representative from the Ministry of Health (tobacco control focal point). WHO presented on lessons learned from countries on tobacco taxation.
The 15th World Conference on Tobacco Or Health (WCTOH)
Location: Singapore Date: 20-24 March 2012
WCTOH is held every three years with participation of governmental and nongovernmental tobacco control communities from all countries around the world, and has been instrumental in the progress of global tobacco control. The 15th WCTOH took place from 20 to 24 March 2012 in Singapore, with the theme, "Towards a Tobacco-Free World: Planning Globally, Acting Locally”. With more than 2500 delegates from 120 countries, the conference provided a key platform to exchange ideas and gain valuable insight from many renowned tobacco control experts.
WCTOH covered a number of issues for tobacco control: implementation of the WHO FCTC, noncommunicable diseases (NCDs), tobacco industry interference, research and surveillance of tobacco, tobacco control economics and taxation. WHO made a number of presentations in relation to the economics of tobacco control.
Presentations at the 15th WCTOH
The Solidarity Tobacco Contribution (STC): A new international health-financing concept prepared by the World Health Organization
The presentation summarizes the Solidarity Tobacco Contribution (STC), a new concept developed by WHO. The STC suggests that if countries decide to devote a small amount of tax per pack of cigarettes to fund health, this could generate significant revenue for either national use or as contributions for a global health pooled mechanism. The concept note displayes estimates that if an additional US $0.05/$0.03/$0.01 per pack of cigarettes was applied respectively among 43 high/upper-middle/lower-middle income countries, this would raise a total of US $5.4 billion.
Alternatives to tobacco growing: recent evidence at country and global levels
The presentation provides an overview of the different risks associated to tobacco-growing such as the health, environmental and socio-economic concerns. Examples of existing initiatives that promote alternatives to tobacco growing were then described.
Tobacco tax administration: challenges and the means to move forward
The presentation summarizes preliminary findings of a WHO publication, currently being developed, which looks at the tobacco tax administration challenges and solutions based on case studies developed by Ministry of Finance officials from 12 countries with whom WHO has been closely collaborating on tobacco taxation issues.
Tax administrative measures: do they work?
The presentation was given by Caxton Masudi Ngyewo, Tax Policy Unit, Kenya Revenue Authority. The presentation gives a comprehensive overview about the tobacco market in Kenya including a short history of tobacco taxation system. Then it provides the challenges that tax authority faces with respect to reducing tax avoidance and evasion and the administrative measures that are taken to address these challenges, including licensing, tracking and tracing (monitoring) export and production of cigarettes, and inter-governmental cooperation. At the end, a careful evaluation is provided by discussing a number of lessons learnt from the experience.
Tobacco supply and trade
The presentation illustrates global trends in raw and manufactured tobacco production, trade, prices and the globalization of the tobacco industry. Specifically, it showes that the production of cigarettes and tobacco leaves has been increasing in lower-middle income countries; high-income countries remain the major exporters of cigarettes and lower-middle income countries are the major exporters of tobacco leaves.
Given the declining global export prices on raw and manufactured tobacco, the price gap is still wide between them with raw tobacco priced much lower in comparison to manufactured tobacco (cigarettes). The presentation briefly discusses the globalization of the tobacco industry where multinational tobacco companies either invest directly or by purchasing privatized, state-owned tobacco manufacturers.
Economic policies that promote tobacco: do we have an answer?
The presentation focuses on the demand reduction measure, tobacco product taxation. Special attention is given to why taxation of tobacco products can benefit public health, and then evaluates tax policies and the capacity of tax administrations to design and implement tax policies so that governments successfully achieving public health goals, while receiving higher tax revenue.
Direct investment and privatization of state-owned enterprises
The presentation considers the global trend of multinational tobacco companies to direct investments globally, and the privatization of state-owned tobacco enterprises. It evaluates the consequences of tobacco manufacturing companies from a public health perspective.
Countries that retained state-owned tobacco industries and the countries that accepted direct investment or privatize the tobacco industry are compared with respect to trends on cigarette consumption, tax policies and retail price of cigarettes.
Tobacco taxation in Bangladesh: administrative and political constraints
The presentation was given by Dr Nasiruddin Ahmed, Chairman, National Bureau of Revenue, Bangladesh during the 2012 WCTOH conference. Mr Chairman discusses the tax system on cigarettes and bidis in Bangladesh, then outlines the political and economic constraints with respect to tobacco tax policies.
The WHO Solidarity Tobacco Contribution (STC) discussed at the plenary meeting of the leading group on innovative financing for development
Location: Madrid, Spain Date: 27 February 2012
The objective of the Leading Group is to explore innovative financing for development projects such as solidarity levies among Member States, in order to finance coordinated action in the health and development sectors. The WHO Solidarity Tobacco Contribution (STC) project was discussed during the Madrid Plenary Meeting working group session on innovative finance and health. The presentation covered key findings of the WHO discussion paper on the STC, including the potential impact on revenue generation and health outcomes, as well as the next steps required for implementation.
The STC concept was received favorably by the Leading Group which provided further momentum for the STC project following similarly positive feedback from the UN High-Level Meeting on NCDs in September 2011 and the G20 Cannes Summit in November 2011.
TobTaxy (making Tobacco Tax Trendy) capacity building workshop
Location: Dublin, IrelandDate: 20-22 February 2012
TobTaxy is a European Commission funded capacity building project with the aim of training the public health and tobacco control community on tobacco taxation and smuggling issues. WHO was invited to provide input to the training materials developed under this project and to train participants in one of a series of capacity building trainings organized under this project.
Participants in the Dublin workshop were from diverse background (public health advocates, NGOs, Ministry of Finance) from the following countries: Denmark, Iceland, Ireland, Netherlands, Sweden and United Kingdom. WHO made a presentation on the link between taxes/prices and demand and provided feedback to other taxation related issues raised during the workshop.