CISLAC, TJNA Recommend 75% Tax Increase on Tobacco Companies, Products

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· Lament loss of 17,500 lives to tobacco use annually

Gboyega Akinsanmi

Two civil society organisations, Civil Society Legislative Advocacy Centre (CISLAC) and Tax Justice Network Africa (TJNA) have asked the federal government to increase excise tax on all tobacco products by 75% in line with the recommendation of the World Health Organisation (WHO).

They justified their proposal on the ground that tobacco consumption is the leading cause of preventable diseases and death in the country, annually responsible for 17,500 deaths while weekly killing at least 207 male consumers and 130 female consumers.

They sought increased tax burden on tobacco companies and products at a workshop Transparency International (TI) and CISLAC organised on tobacco taxation in Lagos recently for TJNA’s members in Southwest.

At the workshop, the Executive Director of CISLAC, Mr. Auwal Rafsanjani lamented devastative effect of tobacco consumption on public health, disclosing that Nigeria “is the third biggest tobacco market in Africa.”

In Nigeria, for instance, Rafsanjani said smoking prevalence among adults “is estimated at 5.6% (or about 2.4 million), smoking an average of eight cigarette sticks per day. About 18% of the youth population between 13 and 15 years also smoke” with devastating effects on their health.

Citing a report of the 2012 Global Adult Tobacco Survey (GATS), Rafsanjani said tobacco use “has been ascribed as the highest contributor to death related to non-communicable diseases, most of which are preventable death.”

Apart from accounting for the major cause of preventable deaths, according to him, cigarette smoking is the leading cause of lung cancer in Nigeria. And about 87% of lung cancer death is accredited to cigarette smoking.

Consistent with the WHO estimates, he pointed out that tobacco globally causes about six million deaths each year. About 10% of the deaths (or 600,000) occur in non-smokers due to second-hand smoke.

On this account, the executive director noted that the harmful effect of tobacco consumption “has motivated countries including Nigeria, to implement control measures to tackle tobacco consumption and affordability.”

He said tobacco taxation “is one of the policy measures that has gained top recognition in Nigeria given that it is widely credited as the most effective tool to reduce tobacco consumption. Previously, only 20% ad valorem excise tax was levied on an average pack of cigarettes sold for N183 in 2017.”

In June 2018, Rafsanjani explained that a specific tax “was introduced and the price of a pack of cigarettes increased by an additional N20. Give the low unit cost analysis in Nigeria, however, the new tobacco tax amounts to a total excise tax burden of less than 20% of retail prices.”

He observed that the tax regime “is very small compared to 75% excise tax burden the WHO recommended. Thus, in order to impact tobacco affordability and significantly reduce consumption and prevalence, a sustainable tobacco taxation policy is only important, but necessary.”

The executive director said: “While the tobacco companies make profits, they do so at the detriment of public health as tobacco smoking is a well-established behavioural risk factor for cardiovascular disease.

“It is in mitigating the health consequences arising from tobacco use that the WHO developed the Framework Convention on Tobacco Control (FCTC) as a guideline for countries to domesticate country specific tobacco control frameworks.

“The FCTC remains the most comprehensive guideline for tobacco control globally as it recommends several measures for controlling tobacco use and regulating the tobacco industry. One of the strong measures, which the convention recommends, is the use of price and tax measure as captured in Article 6 of the FCTC.

“The objective of Article 6 is simple. It seeks to make tobacco products less affordable especially to low-income earners, children and youth as a means of reducing consumption and initiation. The convention recognizes this measure as an effective tobacco control tool.”

The executive director pointed out that the convention indeed encouraged all signatories worldwide including Nigeria “to efficiently increase taxes on tobacco products to achieve the objective.”

He disclosed that Nigeria in domestication of the FCTC had enacted the National Tobacco Control Act in 2015, giving the country a legal framework to implement tobacco control measures.

Similarly, Rafsanjani explained that the country adopted a tobacco taxation regime in 2018, which enabled the federal government to collect specific tax in addition to existing ad valorem rates.

Although the rates fall well short of the FCTC recommended benchmark, the executive director emphasised that the need to ensure that the tax regime “is effectively implemented to yield desired results.”