Sat | Nov 25, 2017

Increase coming on tobacco tax

Published:Wednesday | July 19, 2017 | 12:00 AMJovan Johnson
Tufton

The Jamaican Government has warned that it will be increasing taxes on tobacco and its related products in line with recommended rates set by the World Health Organization to fight lifestyle diseases.

But, Carreras, one of the leading marketers and distributors here, has said that while it welcomes regulations for public-health reasons, the Government has to be careful it does not fuel the underground trade, which could pose an even greater health and security risk.

The warning by Health Minister Dr Christopher Tufton yesterday follows a recent CARICOM summit where leaders recommitted to implementing more measures to fight the epidemic of non-communicable diseases like stroke, cancer and obesity in the region.

An update on regional efforts since a 2007 NCD declaration revealed that no CARICOM state achieved the WHO's target of taxes on cigarettes at 75 per cent of the sale price.

Currently, rates of taxation range from 17 per cent to 63 per cent.

Tufton told the House of Representatives yesterday that a comprehensive tobacco control bill being reviewed will, among other things, regulate price and tax measures that will "effectively" contribute to the reduction in consumption.

"I can unequivocally state that the Government is committed to the translation of the [WHO's Framework Convention on Tobacco Control] into effective national implementation," he said yesterday, while contributing to a motion by Central Kingston Member of Parliament Ronald Thwaites regarding public-health issues arising from the use of tobacco and ganja.

"Therefore," he said, "priority areas for the Government include full implementation of a comprehensive ban on tobacco advertising, promotion and sponsorships; enacting comprehensive tobacco-control legislation; and reducing demand on tobacco products through increased taxes."

Marcus Steele, managing director of Carreras, told The Gleaner yesterday that with increased taxation, it should not be assumed that consumption will decline. Instead, he said, it's the legal market that would decline while illegal one thrives.

"It deprives the Government of tax revenue and increases the exposure to even a bigger health risk because consumers will be looking for cheaper cigarettes that are not regulated at all. The revenue from the illicit market, don't believe that it is used for education and social infrastructure; it is used to fund the criminal networks because it's criminals behind it."

He added: "We have to ensure that in trying to regulate the industry through taxation, we don't create a bigger problem."

That underground market, Peter Bunting, the opposition spokesman on national security, said is booming in rural parishes, especially Clarendon and Manchester.

"It is now more prolific than the official cigarette brands which we're collecting tax on. We have no idea what is in these cigarettes and the packs are designed to be similar to some of the well-known brands," he said.

Bunting added: "This is undoubtedly not only putting our population at risk, but one of the things fuelling organised crime in Jamaica and corrupting the customs and whole regulatory system."

jovan.johnson@gleanerjm.com