Web posted at: 5/14/2009 1:11:9
Source ::: The Peninsula/ By Huda NV
DOHA: Qatar and GCC countries can prevent millions of premature deaths if higher taxation and pricing is imposed on tobacco, according to the World Health Organisation.
WHO Framework Convention on Tobacco Control has called for awareness on taxation and the myths and facts related to it. World wide, governments can collect revenues from taxes on a lethal product and diverting it for health promotion. Given the heavy burden of tobacco use, particularly in low-income countries where consumption is high, dedicating a portion of revenues from taxes for health promotion initiatives can be easily justified to reduce negative externalities.
The GCC countries can generate higher excise revenues from tobacco products as the currently low excise tax levels and the fact that demand in the region is static to price. This health promotion strategy would entail allocating a portion of their tobacco tax revenues to fund national and other lower income countries’ health care systems.
WHO brushes away the myth that countries with a higher cigarette tax suffer more from the illicit trade. Illicit trade is not a significant factor to justify restricting higher pricing policies. The illicit trade provisions within the WHO Framework Convention on Tobacco Control have heightened governmental awareness of such smuggling activities.
Though increasing taxes on cigarettes is regarded as the main cause of smuggling and may increase the incentive for illicit trade of cigarettes, studies demonstrate that other factors may be playing more significant roles in the degree of smuggling activities than higher taxes alone. Higher smuggling activities in low-taxed Mediterranean countries provide a strong example of the comparable illicit trade burden on countries whose tax rates on cigarette products are relatively low.
Any success in curbing the illicit trade rests largely on government’s strong commitments to combating these activities: The higher the commitment, the lower the smuggling, according to WHO.
Cigarette smuggling does not directly apply to the GCC countries. However, WHO warns that these countries, including Qatar, may be at risk of organised long-distance international illicit trade.
Qatar along with other GCC countries relies only on import duties for cigarettes. The GCC customs officials have requested additional time to increase import duties of importers’ prices during the last several years, according to WHO. A 200 percent import duty will increase the import cigarette prices of Qatar to $3.12 per pack, which will be still lower than that of many high income countries’ price levels. The total tax incidence in these countries in 2004-05 was 51percent of the retail price, which were lower than the average retail price and the total tax incidence of upper-middle-income countries.
The export prices per pack of cigarettes to the region vary between $0.12/pack to $0.40/pack. In 2007, GCC countries received 1.9bn packs of cigarettes when the total population was 40m. Qatar alone received 50.7m packs or (55 packs/capita) in 2007.
Of the 1.1bn people who smoke worldwide, 61.8m live in the Middle East region. In the region, tobacco is predicted to kill about 221,880 people in 2010 and increase to 540,281 people in 2030 (World Bank 1999) if the current smoking prevalence rates persist. In accordance with the WHO’s MPOWER policies, governments in Middle East can prevent millions of premature deaths and if they adopt measures to reduce the demand for tobacco, including introducing higher tax and pricing policies which are especially effective among children, adolescents, and the poor.
http://www.thepeninsulaqatar.com/Display_news.asp?section=Local_News&subsection=Qatar+News&month=May2009&file=Local_News200905141119.xml
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