Association calls for heavy tobacco taxes to tame smoking

A farmer harvesting tobacco. PHOTO/Courtesy.

Kenya should increase tax on tobacco products to reduce their consumption and safeguard people’s health, the National Taxpayers Association (NTA) has said.
NTA is a tax justice think tank that carries out research on the tax levied on various consumer goods in the country including tobacco.
According to Fransisca Marabu of the NTA, Kenya’s current excise tax regime has seen the tax make up 58 percent of the price of tobacco products on sale.
Ms Marabu said the country’s tobacco excise taxation rate is currently the highest in East Africa.
“The country’s tobacco excise rate is the highest in the East African region as compared to Uganda which is at 42 percent and Tanzania which is at 16 percent respectively,” said Ms Marabu in Nairobi on July 21, 2021.
She however pointed out that the rate still falls short of the World Health Organization’s recommended taxation rate of between 70-75 percent for of the price charged for tobacco products.
“We need to push the tax up to the recommended World Health Organization levels of between 70-75 percent. This is because studies have shown that higher tobacco product prices discourage the consumption of cigarettes and related products,” Ms Marabu said.
She said the move would result in more revenue for the government and less expenditure on managing the many effects of tobacco smoking that include non-communicable diseases like lung cancer.
“Increasing taxes on tobacco products will be a win-win situation as it will benefit the government’s revenue collection efforts as well as the health sector,” Ms Mararu said.

She also found fault with the current taxation regime that sets a different tax rate for different categories of tobacco products, with unfiltered cigarettes attracting a lower tax from filtered ones.
The NTA is urging the government to adopt a uniform specific tax on tobacco products in order to curb their usage in the country.
Ms Marabu lamented what she termed the tobacco industry’s ‘established tendency to try and bend the rules’ in its efforts to maintain its profitable foothold in the Kenyan market.
In studies done by the Centres for Disease Control (CDC), cigarette smoking has been shown to increase the risk of coronary heart disease by 2 to 4 times.
Data shows that the habit also raises the risk of stroke by 2 to 4 times. For male smokers, the risk of developing lung cancer is higher by a whopping 25 times.

Among women who smoke, the risk of cancer is even higher at 25.7 times that of non-smokers.  
According to a statistical study by the World Health Organization (WHO), close to a 8 billion sticks are consumed in Kenya every year.
Figures from the Global Tobacco Survey conducted in 2007 revealed that 18.5 percent of Kenyan youth aged between13 and 15 had used tobacco products.
In 2014, the survey reported the prevalence of consumption for males at 19.5 percent and that of females at 4.5 percent respectively.
Speaking to, Mr Phillip Musamia of the International Institute for Legislative Affairs (IILA) said the smoking numbers have shot up.
“An estimated 10 percent of the total national population that is around 50 million smokes cigarettes meaning that the consumption could have increased to 10 billion sticks annually,” said Mr Musamia.
“It is estimated that the government spends an outrageous Sh15 billion every year to mop up the effects of tobacco abuse,” said the tax administration and tobacco industry surveillance expert.
Cigarette smoking is the most common type of tobacco product consumption in the country, with a number of harmful effects to smokers’ health.
Mr Musamia said the practice of levying high taxes on tobacco products had been shown to be an effective deterrent for their use.
“Studies in countries like Zambia and South Africa have shown that the consumption patterns roughly follow those of excise taxation and revenue.

Higher taxes and related price measures result in lower revenues due to reduced consumption,” said Mr Musamia.
Despite the country’s efforts to safeguard its people’s health through stringent tobacco rules, it has not spared the challenge of enduring vigorous resistance by the monied and influential tobacco industry.  
In 2007, Kenya passed the Tobacco Control Act.

Seven years later, it operationalized the rules in the 2014 Tobacco Control Regulations .
Tobacco giant British American Tobacco (BAT-K) did not take the threat to its business lying down.

The firm challenged the rules at the high court, which ruled in favour of the new measures.
Undeterred, BAT then roped in local rival Mastermind into the battle in an attempt to overturn the ruling at the court of appeal. The appeals court upheld the high court ruling.
BAT-K went on to challenge the two decisions at the Supreme Court, which brought the lengthy court battle to an end with a 2019 judgement that agreed with the two lower courts.
Among the most bitterly contested sections of the regulations is the Solatium Fund, that proposes a 2 percent tax on all profits made by tobacco manufacturers in the country.
Five years after the landmark ruling, there are no signs that the fund’s statutory deductions from tobacco manufacturing industry profits have been enforced.  
NTA is now appealing to the government to enforce the Solatium Fund so as to boost its poorly funded tobacco control activities.
The Solatium Fund will use the proceeds from the taxes to fund tobacco control activities. Kenya’s tobacco control arm is the Tobacco Control Board.
According to Ms Marabu, the board’s reach and capacity is “severely limited” by lack of funding.
“The board is currently operating on a meagre budget that blocks it from doing much in the are of comprehensive tobacco control in the country.

Monies obtained from the enforcement of the Solatium Fund will make a significant difference in its ability to expand its activities and make its impact felt countrywide,” said Ms Marabu.

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