The Independent Uganda: You get the Truth we Pay the Price
Kampala, Uganda | THE INDEPENDENT | More taxes imposed on tobacco products could reduce smoking in Uganda. That is the suggestion presented in the latest study by the Kampala-based think tank, the Economic Policy Research Centre-EPRC.
The study led by Dr Ibrahim Kasirye, a Principal Research Fellow at the Economic Policy Research Centre and Anita Ntale, a Research Analyst at the same Centre says in Uganda, excise taxes currently make up 31 percent of the retail price for regular cigarettes against the World Health Organisation recommendation of 70 percent.
The EPRC study explored the possibility of higher taxes on tobacco as effective policy instruments for reducing smoking among the most vulnerable groups like youth in Uganda. They recommend that excise taxes duties should make up to 70 percent of the retail price of cigarettes.
Tobacco products in Uganda are said to be lowly priced in comparison to other basic household items. The EPRC study notes that overall, the tax changes in Uganda have been driven by the need to raise additional tax revenues rather than by health concerns.
Uganda ratified the World Health Organisation Framework Convention on Tobacco Control (WHO FCTC) in June 2007. It has taken a strong anti-tobacco stance although experts say more must be done with regard to taxation as a tobacco control tool.
Expenditure on cigarettes:
Research, according to the EPRC shows that in 2016, an average tobacco user in Uganda spent up to one million Shillings (USD 365) annually on cigarettes. This amounts to over half of the 2016 per capita gross national income which stood at USD 630 (2.3 million Shillings).
The study says although the percentage of tobacco use has reduced over the past 5 years from 10.5 percent in 2012/13 to 5.4 percent in 2016/17, smoking prevalence among the youth has remained higher than the national rate.
The Uganda Global Youth Tobacco Survey Report in 2008 found that up to 15.6 percent of the students had ever smoked cigarettes while the national rate from the 2009/10 Uganda National Health Survey was 8.5 percent.
That, according to the researchers is a worrying trend because reducing the numbers of new smokers is one of the key tenets of tobacco control.
The 2017 excise tax diagnostic study by the World Bank showed that in the past 25 years, for every 1 percent increase in GDP the excise tax on cigarettes and other tobacco products has only increased by a meagre 0.18 percent and as such excise tax revenues on tobacco products are highly inelastic. The inelastic response of tobacco excise taxes to inflation or growth in GDP undermines efforts to curb consumption.
The finding by EPRC coincides with findings of a study published in the British Medical Journal which found that over 67 million smokers around the world abandon their smoking habit if the price of a packet of cigarettes was increased by 50 percent. It said increasing cigarette prices through taxation would benefit the poorest in each country the most.
The World Health Organisation (WHO) estimates that 100 million people fall into poverty every year because they have to pay for health care.
The study found that for taxes to be effective, they must be applied to all products to prevent companies from pushing short, cheap cigarettes or other forms of tobacco.
For Uganda, the researchers say Taxation as a tool for tobacco control is underpinned by two competing objectives for governments.
These include; optimization of revenue by imposing higher taxes and to use the higher prices borne out of those higher taxes as a deterrent to suppress consumption and reduce the resultant negative effects.
